A furniture store has a love seat on sale for $699.00,with the payment due one year from today.The store is willing to discount the price at an annual rate of 5% if you pay today.What is the amount if you pay today?

Question

Quizplus · Accepted Answer

The amount if you pay today can be calculated using the formula for present value: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value ($699), r is the annual discount rate (5% or 0.05), and n is the number of years (1). Plugging in the values: PV = $699 / (1 + 0.05)^1 = $665.71.

A Furniture Store Has a Love Seat on Sale for $699.00,with