Given the Present Value (PV) formula
[tex]PV=PMT\times\frac{1-(\frac{1}{(1+i)^n})}{i}[/tex]Write out the parameters
[tex]\begin{gathered} PV=\text{?} \\ n=39 \\ i=0.039 \\ \text{PMT=\$196} \end{gathered}[/tex]Substitute the following values in the present value formula to find the PV
[tex]PV=196\times\frac{1-(\frac{1}{(1+0.039)^{39}})}{0.039}[/tex][tex]PV=196\times\frac{1-0.2249021697}{0.039}[/tex][tex]PV=196\times\frac{0.7750978303}{0.039}[/tex][tex]\begin{gathered} PV=196\times19.87430334 \\ PV\approx3895.36 \end{gathered}[/tex]Hence, the Present Value (PV) is approximately $3895.36
