The rate of earnings is 10% and the cash to be received in two year is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest:

Question

Quizplus · Accepted Answer

Using the partial table of present value at compound interest, the factor for 10% and 2 years is 0.826. Thus, the present value amount is calculated by multiplying the cash to be received by the factor: 
Present value = $10,000 x 0.826 = $8,260. Therefore, the correct choice is D.

The Rate of Earnings Is 10% and the Cash to Be