A single amount of $5,000 is to be received in 3 years.If the single amount is discounted at 6% for 3 periods,the present value is ________.The present value of one for 3 periods at 6% is 0.84.The present value of an ordinary annuity of one for 3 periods at 6% is 2.673.

Question

Quizplus · Accepted Answer

To find the present value of the single amount, we can use the formula:

Present value = Future value / (1 + r)^n

where r is the discount rate and n is the number of periods.

In this case, the future value is $5,000, r is 6%, and n is 3.

So, the present value = $5,000 / (1 + 0.06)^3 = $4,200 (rounded to the nearest dollar).

Therefore, the best choice is A).

A Single Amount of $5,000 Is to Be Received in 3