You are to receive $12,000 at the end of 5 years.The available yield on investments is 6%.Which table would you use to determine the value of that sum today?
A) Present value of an annuity of $1
B) Future value of an annuity
C) Present value of $1
D) Compound sum of $1

Question

Quizplus · Accepted Answer

To determine the present value of a future sum, we need to use present value tables. Out of the four options given, only option C (Present value of $1) is a present value table. The other three options are related to annuities and future value. Hence, option C is the best choice to determine the present value of $12,000 that will be received after 5 years.

You Are to Receive $12,000 at the End of 5