The present value of $250,000 received in 10 years at 2 percent interest is approximately:
A)$205,087.
B)$212,051.
C)$305,194.
D)$195,085.

Question

Quizplus · Accepted Answer

The present value (PV) can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($250,000), r is the annual interest rate (2% or 0.02), and n is the number of years (10). Plugging these values into the formula gives PV = $250,000 / (1 + 0.02)^10 ≈ $205,087.

The Present Value of $250,000 Received in 10 Years at 2