Which of the following is the equivalent of $300 received today?
A)$795.99 to be received 20 years in the future assuming a 5 percent annual interest rate.
B)$100 to be received two years from now and $200 three years from now.
C)$300 compounded at 10 percent for one year.
D)All of these are the equivalent of $300 received today.

Question

Quizplus · Accepted Answer

To find the equivalent future value of $300 today at a 5% interest rate over 20 years, we use the formula FV = PV * (1 + r)^n. Here, FV = $300 * (1 + 0.05)^20 = $795.99, which matches option A. Options B and C do not match the equivalent value of $300 today.

Which of the Following Is the Equivalent of $300 Received