The present value of a single amount can be represented as
A) PV0 = FVn(PVIFi,n)
B) PV0 = FVn(PVIFAi,n)
C) PV0 = FVn[1/(1 + i)n]
D) a and c

Question

Quizplus · Accepted Answer

The present value of a single amount can be calculated using two common formulas:

PV0 = FVn(PVIFi,n)
This formula uses the present value interest factor (PVIF) to find the present value of a future amount, based on a given interest rate and time period.

PV0 = FVn[1/(1 + i)n]
This formula uses the concept of discounting, where future cash flows are reduced to their present value by dividing them by a factor of (1 + i)n, where i is the discount rate and n is the number of periods.

Both of these formulas are valid ways to calculate the present value of a single amount, depending on the specific context and information given. Therefore, the best choice is D) a and c.

The Present Value of a Single Amount Can Be Represented