Which one of the following is the correct formula for the current value of $600 invested today at 5 percent interest for 6 years? A)PV = $600/ [(1 + .06) × 5] B)PV = $600/ [(1 +.05) × 6] C)PV = $600/ (.06 × 5) D)PV = $600 / (1 + .05)⁶ E)PV = $600 / (1 + .06)⁵

Question

Quizplus · Accepted Answer

The correct formula for the present value of an investment is PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of periods. Here, FV is $600, r is 0.05, and n is 6.

Which One of the Following Is the Correct Formula for the Current