What is the present value of a $7,000 payment made in six years when the discount rate is 4%?
A) $5,290.42
B) $5,532.20
C) $5,802.82
D) $6,103.73

Question

Quizplus · Accepted Answer

The present value (PV) is calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($7,000), r is the discount rate (0.04), and n is the number of years (6). Plugging in the values: PV = 7000 / (1 + 0.04)^6 = 7000 / 1.265319 = $5,532.20.

What Is the Present Value of a $7,000 Payment Made