Calculate the present value of an investment that will be worth $2,000 after 3 years at 8% per year compounded annually. Round your answer to the nearest cent.
A)$1,587.66
B) $1,574.51
C) $1,715.81
D) $2,258.90
E) $1,944.78

Question

Calculate the present value of an investment that will be worth $2,000 after 3 years at 8% per year compounded annually. Round your answer to the nearest cent. ​
A)$1,587.66
B) $1,574.51
C) $1,715.81
D) $2,258.90
E) $1,944.78

Quizplus · Accepted Answer

We can use the formula PV = FV/(1+r)^n where PV is the present value, FV is the future value, r is the annual interest rate and n is the number of years. Substituting the given values, we get PV = 2000/(1+0.08)^3 = $1,587.66. Therefore, the best choice is A.

Calculate the Present Value of an Investment That Will Be