To calculate the present value of $1,000 to be received in 10 years with a 12 percent interest rate compounded semiannually, you can use the formula for present value: �=�(1+�/�)��P= (1+r/n)nt F Where: �P is the present value, �F is the future value (in this case, $1,000), �r is the annual interest rate (as a decimal), �n is the number of compounding periods per year, and �t is the number of years. In this scenario: F = $1,000 �=0.12r=0.12 (12% expressed as a decimal) �=2n=2 (compounded semiannually, so two compounding periods per year) �=10t=10 years �=1,000(1+0.12/2)2×10P= (1+0.12/2)2×10 1,000 Let's calculate: �=1,000(1+0.06)20P= (1+0.06)20 1,000 �≈1,000(1.06)20P≈ (1.06)20 1,000 �≈1,000(2.158924)P≈ (2.158924)1,000 �≈463.00P≈463.00 Therefore, the present value of $1,000 to be received in 10 years with a 12 percent interest rate compounded semiannually is approximately $463.00.
