Assume you receive $4,800 in two years and the annual interest rate is four percent.Using the present value formula,how much is that amount worth in today's dollars (rounded to the nearest dollar)?

Question

Quizplus · Accepted Answer

The present value (PV) is calculated using the formula: PV = FV / (1 + r)^n, where FV is the future value ($4,800), r is the annual interest rate (0.04), and n is the number of years (2). PV = $4,800 / (1 + 0.04)^2 = $4,800 / 1.0816 ≈ $4,438.

Assume You Receive $4,800 in Two Years and the Annual