I will require 100 units in three years. I will receive 12% per year at the bank. How much should I deposit now so that I obtain the appropriate amount in 3 years?
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$\mathrm{with}\left(\mathrm{Finance}\right)\:$

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$\mathrm{presentvalue}\left(100\,0.12\,3\right)$

This can be calculated as:
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$\frac{100}{{\left(1\+0.12\right)}^{3}}$

Now suppose that the interest is compounded monthly. The calculation proceeds as follows:
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$r\u2254\mathrm{effectiverate}\left(0.12\,12\right)$

${r}{\u2254}{0.126825030}$
 (3) 
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$\mathrm{presentvalue}\left(100\,r\,3\right)$

The effect of the compounding over shorter periods is easily seen.
I have been offered a zerolevel bond paying 1000 units in 5 years for 800 units. The risk of default is nil. Should I buy the bond if the interest rate is 10%?
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$\mathrm{presentvalue}\left(1000\,0.10\,5\right)$

Answer: it is definitely not a good deal. The bond would be yielding
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$\mathrm{fsolve}\left(\mathrm{presentvalue}\left(1000\,\mathrm{rate}\,5\right)800\,\mathrm{rate}\right)$

about 4.6 %