Kristen's grandmother promises to give her $1,000 at the end of five years. How much is the money worth today, assuming Kristen could invest the money and earn a 6% annual rate of return? (Round to the nearest dollar).

Question

Quizplus · Accepted Answer

This problem requires calculating the present value of a future amount using the formula: Present Value = Future Value / (1 + r)^n, where r is the annual interest rate and n is the number of years. Plugging in the given values, we get: Present Value = 1,000 / (1 + 0.06)^5 = $747. Therefore, the best choice is C.

Kristen's Grandmother Promises to Give Her $1,000 at the End