Answer:
[tex]\large\boxed{\arge\boxed{\$17,441.91}}[/tex]
Explanation:
The value that you should be willing to pay for the promisory note that will pay $25,000 at maturity 9 years from now is the present value of the note.
To calculate the present value you must discount the money at 4% compounded continuosly.
The equation to calculate the present value of an amount to be paid in t years, when the money is worth r%, compounded continuosly, is:
[tex]Present\text{ }value=\dfrac{Future\text{ }Payment}{e^{rt}}[/tex]
Substituting:
[tex]Present\text{ }value=\dfrac{\$25,000}{e^{0.04\times 9}}=\$17,441.91[/tex]
