Given a 6 percent interest rate, compute the present value of deposits made in years 1, 2, 3, and 4 of $1,200, $1,400, $1,400, and $1,500.
A) $4,356.52
B) $4,741.68
C) $5,188.68
D) $5,506.00

Question

Quizplus · Accepted Answer

The present value of each deposit is calculated using the formula PV = FV / (1 + r)^n. Summing these values gives the total present value: $1,200/(1.06)^1 + $1,400/(1.06)^2 + $1,400/(1.06)^3 + $1,500/(1.06)^4 = $4,741.68.

Given a 6 Percent Interest Rate, Compute the Present Value