About how much is the present value of $1 that will be paid to you in 3 years if the interest rate were 5%?

Question

Quizplus · Accepted Answer

The present value (PV) of $1 to be received in 3 years at an interest rate of 5% is calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($1), r is the annual interest rate (0.05), and n is the number of years (3). Plugging in the values, we get PV = $1 / (1 + 0.05)^3 = $1 / 1.157625 = approximately $0.86.

About How Much Is the Present Value of $1 That