The present value equation is: A) PV = FV_t+ (1 + r)^t. B) PV = FV_t- (1 + r)^t. C) PV = FV_t/[1/(1 + r)^t]. D) PV = FV_t/(1 + r)^t. E) PV = FV_t* (1 + r)^t.

Question

Quizplus · Accepted Answer

The correct formula for present value (PV) is PV = FV / (1 + r)^t, where FV is the future value, r is the rate of return, and t is the time in years. This matches closest with option D, which simplifies to the correct formula structure.

The Present Value Equation Is