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

Question

Quizplus · Accepted Answer

To find the present value, we need to use the present value formula:

PV = FV / (1 + r)^n

PV = Present value 
FV = Future value 
r = Interest rate 
n = Number of years

Using the given values:

PV = 300,000 / (1 + 0.04)^12 
PV = 300,000 / 1.597 
PV = $187,378.95

Therefore, the present value of $300,000 in 12 years at 4 percent interest is approximately $187,379.

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