Given an annual interest rate of 3%,the present value of a future payment of $2 080 to be paid in 1 year is:

Question

Quizplus · Accepted Answer

Using the formula for present value:
PV = FV / (1 + r)^n
where PV = present value, FV = future value, r = annual interest rate, and n = number of years

Plugging in the values given:
PV = 2080 / (1 + 0.03)^1
PV = 2080 / 1.03
PV = $2,019.42 to the nearest cent

Thus the best choice is C.

Given an Annual Interest Rate of 3%,the Present Value of a Future