Using the tables above,what would be the present value of $25,000 (rounded to the nearest dollar)to be received 4 years from today,assuming an earnings rate of 10%?

Question

Quizplus · Accepted Answer

Using the Present Value of an Annuity formula, we can calculate the present value of the $25,000 payment: PV = C x [(1 - (1 + r)^-n) / r], where C is the payment amount, r is the interest rate, and n is the number of periods. 
Plugging in the values, we get: PV = $25,000 x [(1 - (1 + 0.10)^-4) / 0.10] = $17,075. Therefore, the best choice is B.

Using the Tables Above,what Would Be the Present Value of $25,000