To find the present value of $1000 discounted for 20 years at 8%, when using a financial calculator, the correct entry is
A) N=20, i=.08,PMT=0, FV=1000 solve for PV.
B) N=20, i=8,PMT=0, FV=1000 solve for PMT.
C) N=20, i=.08,PMT=0, PV=1000 solve for FV.
D) N=20, i=8,PMT=0, FV=1000 solve for PV.

Question

Quizplus · Accepted Answer

We want to find the present value (PV) of $1000 discounted for 20 years at 8%. We know the future value (FV) is $1000, the number of periods (N) is 20, and the interest rate per period (i) is 8%. We also know that there are no additional payments (PMT) made during this time period. Therefore, we can use the formula to solve for PV, which is:
PV = FV / (1 + i)^N
Substituting the values given, we get:
PV = $1000 / (1 + 0.08)^20
Using a financial calculator, we can enter:
N = 20, i = 8, PMT = 0, FV = 1000 and solve for PV. The correct choice is D.

To Find the Present Value of $1000 Discounted for 20