Below is a table for the present value of $1 at Compound interest. Below is a table for the present value of an annuity of $1 at compound interest.
Using the tables above, what would be the present value of $15,000 (rounded to the nearest dollar) to be received four years from today, assuming an earnings rate of 10%?

Question

Below is a table for the present value of $1 at Compound interest.  Below is a table for the present value of an annuity of $1 at compound interest.
 Using the tables above, what would be the present value of $15,000 (rounded to the nearest dollar) to be received four years from today, assuming an earnings rate of 10%?

Quizplus · Accepted Answer

First, we need to find the present value factor for a single payment of $1 at 10% interest for 4 years, using the table for present value of $1 at compound interest. The factor is 0.683, meaning that the present value of $1 to be received in 4 years at 10% interest is $0.683 today.

Next, we need to multiply that factor by the amount we want to find the present value of, which is $15,000.

Present value = $15,000 x 0.683 = $10,245 (rounded to the nearest dollar)

Therefore, the best choice is B.

Below Is a Table for the Present Value of $1