What is the approximate present value of $500 four years from now if the interest rate is 2 percent?

Name: What is the approximate present value of $500 four years from now if the interest rate is 2 percent?
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Quizplus · Accepted Answer

The present value (PV) can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($500), r is the annual interest rate (2% or 0.02), and n is the number of years (4). Plugging in the values, we get PV = $500 / (1 + 0.02)^4 ≈ $462.

What Is the Approximate Present Value of $500 Four Years