What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $1.00.
A) $5,790
B) $11,574
C) $9,210
D) $17,010

Question

Quizplus · Accepted Answer

The present value (PV) can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($12,500), r is the annual discount rate (0.08), and n is the number of years (10). Plugging in these values gives PV = $12,500 / (1 + 0.08)^10 ≈ $5,790.

What Is the Present Value of $12,500 to Be Received