Answer:
PV 550,506.64
Explanation:
[tex]Nominal \times (1 - \: discount \: rate)^{time} = \: Present \: Value[/tex]
[tex]560,000 \times \: (1-0.05)^{4/12} = PV[/tex]
PV = 550,506.64
We can convert the discount rate to interest rate and reach the same value:
[tex]i= \frac{d}{1-d} = 0.05/0.95 = 0.052631578[/tex]
[tex]\frac{Nominal}{(1+rate)^{time}} = PV[/tex]
[tex]\frac{560,000}{(1+0.052631578)^{1/3}} = PV[/tex]
PV = 550,506.64
