The present value of $3,000 to be received in 5 years at a 10% discount rate is $2000.

Question

Quizplus · Accepted Answer

The formula for present value is PV = FV / (1+r)^n, where PV is the present value, FV is the future value, r is the discount rate and n is the number of years. Using this formula, we can calculate the present value of $3,000 to be received in 5 years at a 10% discount rate as follows:

PV = 3,000 / (1+0.1)^5
PV = 3,000 / 1.6105
PV = 1,860.38

Therefore, the present value of $3,000 to be received in 5 years at a 10% discount rate is $1,860.38, not $2,000. Thus, the answer is B.

The Present Value of $3,000 to Be Received in 5