What is the present value of a $600 payment in one year when the discount rate is 8 percent?
A) $498.61
B) $525.87
C) $555.56
D) $575.09

Question

Quizplus · Accepted Answer

The present value (PV) of a future payment can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value, r is the discount rate, and n is the number of periods. Here, FV = $600, r = 0.08, and n = 1. So, PV = $600 / (1 + 0.08)^1 = $600 / 1.08 = $555.56.

What Is the Present Value of a $600 Payment in One