At an interest rate of 6%, what is the present value of $10,000 to be received five years from now?
A)$5000
B)$7473
C)$10,000
D)$13,382

Question

Quizplus · Accepted Answer

We can use the formula for present value of a future sum: PV = FV / (1 + r)^n 
where PV is the present value, FV is the future sum, r is the interest rate, and n is the number of periods. 
Plugging in the values, we get: PV = 10,000 / (1 + 0.06)^5 
PV = 10,000 / 1.3382 
PV = $7473.

At an Interest Rate of 6%, What Is the Present