The present value of paying $12,000 in year 3 would be more than $12,000.

Name: The present value of paying $12,000 in year 3 would be more than $12,000.
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The present value of a future amount of money, like $12,000 in year 3, is calculated by discounting it back to the present using a specific rate of interest. This process typically results in a present value that is less than the future amount, assuming a positive rate of interest.

The Present Value of Paying $12,000 in Year 3 Would