Interest rates are 10%. What is the present value of £60,000 receivable in 6 years' time?

Question

Quizplus · Accepted Answer

The present value (PV) of a future sum of money can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate per period, and n is the number of periods. Here, FV = £60,000, r = 10% or 0.10, and n = 6 years. Plugging these values into the formula gives PV = £60,000 / (1 + 0.10)^6 = £60,000 / (1.1)^6 ≈ £33,868.

Interest Rates Are 10