You are to receive $12,000 at the end of 5 years. The available yield on investments is 6%. Which table would you use to determine the value of that sum today?
A) Present value of an annuity of $1
B) Future value of an annuity
C) Present value of $1
D) Future value of $1

Question

Quizplus · Accepted Answer

To determine the present value of a future amount (in this case, $12,000 at the end of 5 years), we need to use the present value of $1 table. This table will help us calculate how much we need to invest today at a 6% yield to have a value of $12,000 in 5 years.

You Are to Receive $12,000 at the End of 5