What is the present value of $36,500 to be received five years from today if the discount rate is 6.75%?
A) $26,330.16
B) $26,678.19
C) $26,911.47
D) $28,008.19
E) $28,123.76

Question

Quizplus · Accepted Answer

The present value of a future sum of money is calculated using the formula:PV = FV / (1 + r)^nwhere:PV is the present valueFV is the future valuer is the discount raten is the number of yearsIn this case, we have:FV = $36,500r = 6.75% = 0.0675n = 5Plugging these values into the formula, we get:PV = $36,500 / (1 + 0.0675)^5PV = $36,500 / 1.3963PV = $26,330.16Therefore, the present value of $36,500 to be received five years from today if the discount rate is 6.75% is $26,330.16.

What Is the Present Value of $36,500 to Be Received