The question "What is the current value of an amount of cash that will be received at a specific time in the future?" is best answered by which form of the TVM equation? A)PV = $\frac { FV } { ( 1 + r ) ^ { n } }$ B)PV = PV × (1 + r)ⁿ C)PV = (FV/PV)^1/n - 1 D)PV = $\frac { \ln ( \mathrm { FV } / \mathrm { PV } ) } { \ln ( 1 + \mathrm { r } ) }$

Question

Quizplus · Accepted Answer

The correct formula for calculating the present value (PV) of a future amount of cash (FV) that will be received at a specific time in the future, given a specific rate (r) and number of periods (n), is PV = $\frac { FV } { ( 1 + r ) ^ { n } }$. This formula discounts the future value back to its present value.

The Question "What Is the Current Value of an Amount FV(1+r)n\frac { FV } { ( 1 + r ) ^ { n } }(1+r)nFV​

The Question "What Is the Current Value of an Amount $\frac { FV } { ( 1 + r ) ^ { n } }$