Assume you receive $63,000 in three years and the annual interest rate is five 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

To calculate the present value, we need to discount the $63,000 back to the present day using the formula PV = FV/(1+r)^n, where PV is the present value, FV is the future value, r is the annual interest rate, and n is the number of years. Plugging in the numbers, we get PV = $63,000/(1+0.05)^3 = $54,421.81 ≈ $54,422 rounded to the nearest dollar. Therefore, the correct choice is A.

Assume You Receive $63,000 in Three Years and the Annual