What is the present value of $1,800 to be received in 1 year when the discount rate is 9.5% p.a.?
A)$1,643.84
B)$1,501.22
C)$1,487.60
D)$1,636.36

Question

Quizplus · Accepted Answer

Using the formula for present value: PV = FV/(1+r)^n
Where PV is the present value, FV is the future value, r is the discount rate, and n is the number of periods.
We have PV = 1,800/(1+0.095)^1
PV = $1,643.84 (rounded to the nearest cent)
Therefore, the best choice is A.

What Is the Present Value of $1,800 to Be Received