What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10.
A)$5,790
B)$11,574
C)$9,210
D)$17,010

Question

Quizplus · Accepted Answer

The present value (PV) is calculated using the formula: PV = FV / (1 + r)^n, where FV is the future value ($12,500), r is the discount rate (0.08), and n is the number of years (10). Plugging in the values, PV = $12,500 / (1 + 0.08)^10 ≈ $5,790.

What Is the Present Value of $12,500 to Be Received