Find the present value of the given future amount. Assume 360 days in a year.

$123,640 for 238 days at 8.5% simple interest.

The present value is $117,061.7784 ≅ $117,061.78

Step-by-step explanation:

* Lets explain the simple interest rule

- The rule for the future value of a simple interest is:

A = P (1 + rt), Where

# A = future amount

# P = Present amount

# r = Rate of Interest per year in decimal r = R/100

# t = Time period involved in days, months or years

* lets solve the problem

∵ The future amount is $123,640

∴ A = 123,640

∵ The number of days is 238 and the year has 360 days

∴ t = 238/360

∵ The simple rate is 8.5%

∴ r = 8.5/100 = 0.085

∵ A = P (1 + rt)

∴ 123,640 = P[1 + 0.085 (238/360) ]

∴ 123,640 = P[1 + 2023/36000]

∴ 123,640 = P[1.056194444]

- Divide both sides by 1.056194444

∴ P = 117,061.7784

* The present value is $117,061.7784 ≅ $117,061.78