The present value of $300 received 5 years in the future would be calculated as which of the following when the interest rate is 5%?

Question

Quizplus · Accepted Answer

The present value (PV) is calculated using the formula PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of periods. Here, FV = $300, r = 0.05, and n = 5, so the correct formula is 300/(1.05)^5.

The Present Value of $300 Received 5 Years in the Future