At an interest rate of 8.25% compounded annually,what is the present discounted value of $2,000 to be received 2 years from now?
A) $1670.00
B) $1706.77
C) $1716.74
D) $1835.00

Question

Quizplus · Accepted Answer

To find the present discounted value of $2,000 to be received in 2 years, we need to use the formula: PV = FV / (1 + r)^n
where PV is the present value, FV is the future value, r is the annual interest rate, and n is the number of years.

In this case, FV = $2,000, r = 8.25%, and n = 2.

Plugging in these values, we get:
PV = $2,000 / (1 + 0.0825)^2
PV = $2,000 / 1.1711
PV = $1,706.77

Therefore, the best choice is B.

At an Interest Rate of 8