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 of each deposit is calculated 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 for each deposit and summing them gives $4,351.50.

Given a 7 Percent Interest Rate, Compute the Present Value