At an interest rate of 3%,what is the present value of $1,000 to be received five years from now?
A) $850
B) $863
C) $1,159
D) $1,667

Question

Quizplus · Accepted Answer

We can solve this problem using the formula for present value:

PV = FV / (1 + r)^n

where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods.

Plugging in the given values, we get:

PV = 1000 / (1 + 0.03)^5
PV = 1000 / 1.159274
PV = 862.96

The closest answer choice is B, which is $863.

At an Interest Rate of 3%,what Is the Present Value