When the annual interest rate is 7 percent,what is the present value of receiving a payment of $10,000 three years from now?

Question

Quizplus · Accepted Answer

The present value (PV) of receiving a payment in the future can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value, r is the annual interest rate (as a decimal), and n is the number of years. Here, FV = $10,000, r = 0.07 (7%), and n = 3. Plugging these values into the formula gives PV = $10,000 / (1 + 0.07)^3 = $10,000 / 1.225043 = $8,162.98.

When the Annual Interest Rate Is 7 Percent,what Is the Present