Compute the present value of $4,000 paid in five years using the following discount rates: 10 percent in year 1, 2 percent in year 2, 12 percent in year 3, and 9 percent in years 4 and 5.
A) $2,679.15
B) $2,206.81
C) $2,317.03
D) $2,362.19

Question

Quizplus · Accepted Answer

The correct answer is A because the present value of $4,000 paid in five years using the given discount rates is $2,679.15.

Compute the Present Value of $4,000 Paid in Five Years