Lisa Carson has the opportunity to receive $12,000 now or $15,000 in four years.If Lisa can earn 6 percent on her investments,what is the present value of the $15,000 payment?
A)$15,000
B)$13,785
C)$11,881
D)$9,505

Question

Quizplus · Accepted Answer

The present value (PV) of the $15,000 payment can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($15,000), r is the annual interest rate (6% or 0.06), and n is the number of years (4). Plugging in the values, we get PV = $15,000 / (1 + 0.06)^4 = $15,000 / 1.2625 = $11,881.

Lisa Carson Has the Opportunity to Receive $12,000 Now or $15,000