The rate of earnings is 6% and the cash to be received in four years is $20,000. The present value amount, using the following partial table of present value of $1 at compound interest, is? $$\begin{array} { c c c c }
\text { Year } & 6 \% & 10 \% & 12 \% \
\hline 1 & 0.943 & 0.909 & 0.893 \
2 & 0.890 & 0.826 & 0.797 \
3 & 0.840 & 0.751 & 0.712 \
4 & 0.792 & 0.683 & 0.636
\end{array}$$

Question

The rate of earnings is 6% and the cash to be received in four years is $20,000. The present value amount, using the following partial table of present value of $1 at compound interest, is? $$\begin{array} { c c c c } 
\text { Year } & 6 \% & 10 \% & 12 \% \
\hline 1 & 0.943 & 0.909 & 0.893 \
2 & 0.890 & 0.826 & 0.797 \
3 & 0.840 & 0.751 & 0.712 \
4 & 0.792 & 0.683 & 0.636
\end{array}$$

Quizplus · Accepted Answer

The present value of $20,000 received in four years at a 6% rate of earnings is calculated using the present value factor for 4 years at 6%, which is 0.792. Therefore, the present value is $20,000 * 0.792 = $15,840.

The Rate of Earnings Is 6% and the Cash to Be