The present value of $30,000 to be received in two years, at 12% compounded annually, is (rounded to nearest dollar)
A) $23,916
B) $37,632
C) $23,700
D) $30,000

Question

Quizplus · Accepted Answer

The present value (PV) is calculated using the formula: PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of periods. Here, PV = $30,000 / (1 + 0.12)^2 = $23,915.89, which rounds to $23,916.

The Present Value of $30,000 to Be Received in Two