Which of the following is the correct expression for finding the present value of a $1,000 payment one year from today if the interest rate is 6 percent?
A)$1,000 × (1.06)
B)$1,000⁽¹.⁰⁶⁾
C)$1,000/(1.06)
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The correct expression for finding the present value of a future payment is to divide the future value by (1 + interest rate). In this case, the present value would be $1,000 / (1 + 0.06) = $943.40, which is the answer given by option C. Option A is incorrect because it would calculate the future value after one year with interest added. Option B also doesn't work because it uses an exponent format which doesn't relate to present value calculations.

Which of the Following Is the Correct Expression for Finding