The present value of an amount, FV, due in n periods from now and discounted at d% is given by
[tex]PV=FV(1+r)^{-n}[/tex]
Thus, the present value of $25,500 due 12 periods from now, discounted at 11% is given by
[tex]PV=25,500(1+0.11)^{-12} \\ \\ =25,500(1.11)^{-12}=25,500(0.2858) \\ \\ =\bold{\$7,288.94}[/tex]
