Assume you receive $15,000 in four years and the annual interest rate is four percent.Using the present value formula,how much is that worth in today's dollars (rounded to the nearest dollar)?

Question

Quizplus · Accepted Answer

Using the present value formula:

PV = FV / (1 + r)^n

where PV is present value, FV is future value, r is the annual interest rate, and n is the number of years.

Plugging in the values:

PV = $15,000 / (1 + 0.04)^4
PV = $12,821.52

Rounding to the nearest dollar:

PV = $12,822

Therefore, the answer is D.

Assume You Receive $15,000 in Four Years and the Annual