The present value factor for determining the present value of $6,300 to be received three
years from today at 10% interest compounded semiannually is 0.7462.

Question

Quizplus · Accepted Answer

The present value factor is calculated using the formula (1 + r/n)^(-nt), where r is the interest rate, n is the number of compounding periods per year, and t is the number of years. Plugging in the values given, we get (1 + 0.1/2)^(-2*3) = 0.7462, which is true.

The Present Value Factor for Determining the Present Value of $6,300