In an economy with a 9 percent interest rate,the present value of $1,000 that you will receive three years from now is:

Question

Quizplus · Accepted Answer

To find the present value of $1,000 that you will receive three years from now, we use the present value formula:

Present value = Future value / (1 + interest rate)^n

where n is the number of years.

So, in this case, we have:

Present value = $1,000 / (1 + 0.09)^3
Present value = $1,000 / 1.295
Present value = $772

Therefore, the present value of $1,000 that you will receive three years from now is $772, which is the closest answer choice to our calculation.

In an Economy with a 9 Percent Interest Rate,the Present