Dunston Company will receive $300,000 in a future year. If the future receipt is discounted at an interest rate of 10%, its present value is $153,948. In how many years is the $300,000 received?
A) 5 years
B) 6 years
C) 7 years
D) 8 years

Question

Quizplus · Accepted Answer

The present value formula is PV = FV / (1 + r)^n. Plugging in the values: $153,948 = $300,000 / (1 + 0.10)^n. Solving for n gives approximately 7 years.

Dunston Company Will Receive $300,000 in a Future Year