Items 52 through 55 apply to the appropriate use of present value tables. Given below are the present value factors for $1.00 discounted at 10% for one to five periods. Each of the items 52 to 55 is based on 10% interest compounded annually.

-If an individual put $4,000 in a savings account today, what amount of cash would be available two years from today?
A) $4,000 × 0.826
B) $4,000 × 0.826 × 2
C) $4,000 ÷ 0.826
D) $4,000 ÷ 0.909 × 2

Question

Items 52 through 55 apply to the appropriate use of present value tables. Given below are the present value factors for $1.00 discounted at 10% for one to five periods. Each of the items 52 to 55 is based on 10% interest compounded annually.
 
-If an individual put $4,000 in a savings account today, what amount of cash would be available two years from today?
A) $4,000 × 0.826 
B) $4,000 × 0.826 × 2 
C) $4,000 ÷ 0.826 
D) $4,000 ÷ 0.909 × 2

Quizplus · Accepted Answer

0.826 × PV = $4,000; PV = $4,000 ÷ 0.826.

Items 52 Through 55 Apply to the Appropriate Use of Present