Which one of the following is the correct formula for computing the present value of $600 to be received in 6 years? The discount rate is 7 percent. A)PV = $600 (1 + .06)⁷ B)PV = $600 (1 + .07)⁶ C)PV = $600 × (.07 × 6) D)PV = $600/(1 + .07)⁶ E)PV = $600/(1 + 6)^.07

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Quizplus · Accepted Answer

The present value (PV) formula is PV = FV / (1 + r)^n, where FV is the future value, r is the discount rate, and n is the number of periods. Here, FV = $600, r = 0.07, and n = 6.

Which One of the Following Is the Correct Formula for Computing