Suppose you want to realize a future value of $150,000 in 30 years on an investment you make. The average annual rate of return is 8.75%. What will be the present value of your investment?

Question

Quizplus · Accepted Answer

The present value (PV) of an investment that realizes a future value (FV) can be calculated using the formula PV = FV / (1 + r)^n, where r is the annual rate of return and n is the number of years. Plugging in the values: PV = $150,000 / (1 + 0.0875)^30 ≈ $12,112.

Suppose You Want to Realize a Future Value of $150,000