Present Value Given a 7 percent interest rate,compute the present value of deposits made in years 1,2,3,and 4 of $1,000,$1,200,$1,500,and $1,500.
A)$3,967.06
B)$4,351.50
C)$4,859.81
D)$5,207.00

Question

Quizplus · Accepted Answer

The present value is calculated by discounting each deposit back to the present using the formula PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of years. Calculating each deposit: $1,000/(1.07)^1 + $1,200/(1.07)^2 + $1,500/(1.07)^3 + $1,500/(1.07)^4 = $4,351.50.

Present Value Given a 7 Percent Interest Rate,compute the Present