Given an annual interest rate of 3%, the present value of a future payment of $2,080 to be paid in one year is:

Question

Quizplus · Accepted Answer

To find the present value, we use the formula:
present value = future value / (1 + interest rate)^n

where n is the number of years.

In this case, the future value is $2,080, the interest rate is 3%, and n is 1 year. Plugging these values into the formula, we get:

present value = 2,080 / (1 + 0.03)^1
present value = 2,080 / 1.03
present value = 2,019.42

Therefore, the present value of the future payment of $2,080 is $2,019.42.

Given an Annual Interest Rate of 3%, the Present Value