To the nearest dollar, what is the value today of an investment that pays $10,000 in five years, assuming an annual opportunity cost of 6%?
A) $7,473
B) $11,592
C) $8,626
D) $7,130
E) None of the above

Question

Quizplus · Accepted Answer

To find the present value of an investment, you use 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 given values: PV = $10,000 / (1 + 0.06)^5 = $7,472.58, which rounds to $7,473.

To the Nearest Dollar, What Is the Value Today of an Investment