Mary plans on saving $1,000 a year for ten years. She would like to know the value of these savings today. Mary should solve for the:
A) Present value.
B) Present value factor.
C) Future value.
D) Future value factor.
E) Compounded value.

Question

Quizplus · Accepted Answer

The present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return. Mary wants to know the value of her future savings in today's dollars, which requires calculating the present value.

Mary Plans on Saving $1,000 a Year for Ten Years