Which of the following is the formula for present value? A)FV_n = P(1 + i)ⁿ B)FV_n = (1 + i)/P C)FV_n = P/(1 + i)ⁿ D)FV_n = P(1 + i)^-n

Name: Which of the following is the formula for present value? A)FV n = P(1 + i) n B)FV n = (1 + i)/P C)FV n = P/(1 + i) n D)FV n = P(1 + i) -n
Brand: Quizplus
Rating: 4.8 (42 reviews)

Question

Quizplus · Accepted Answer

The formula for present value is P = FV / (1 + i)^n, which can be rearranged to FV = P(1 + i)^n. Substituting FV with the given formula FV_n and rearranging, we get P = FV_n / (1 + i)^n, which is equivalent to choice C.

Which of the Following Is the Formula for Present Value