If we are to receive $1,000,000 in 20 years' time, and the 20- year interest rate is 6.5%, then the present value is $283,797.

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 ($1,000,000), r is the interest rate (6.5% or 0.065), and n is the number of years (20). Plugging in these values, the calculation confirms the present value is approximately $283,797.

If We Are to Receive $1,000,000 in 20 Years' Time