The present value of $300,000 in 12 years at 4 percent interest is approximately:
A)$187,379.
B)$312,451.
C)$427,126.
D)None of these statements is true.

Question

Quizplus · Accepted Answer

Using the formula for present value:

PV = FV/(1 + r)^n

where PV = present value, FV = future value, r = interest rate, and n = number of time periods

Plugging in the given values:

PV = 300,000/(1 + 0.04)^12 ≈ $187,379

The Present Value of $300,000 in 12 Years at 4