The present value of $1000 to be received at the end of five years, if the discount rate is 10%, is [blank].
A)$621
B)$784
C)$614
D)$500

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, r is the discount rate, and n is the number of periods. Plugging in the values, we get PV = $1000 / (1 + 0.10)^5 = $620.92, which rounds to $621.

The Present Value of $1000 to Be Received at the End