Using the following partial table of present value of $1 at compound interest, compute the present value of $20,000 (rounded to nearest dollar) to be received one year from today, assuming an earnings rate of 15%. $$\begin{array} { |l | l | l | l | }
\hline 20 \% & 15 \% & 10 \% & \text { Year } \
\hline 0.833 & 0.870 & 0.909 & 1 \
\hline 0.694 & 0.756 & 0.826 & 2 \
\hline 0.579 & 0.659 & 0.751 & 3 \
\hline 0.482 & 0.572 & 0.683 & 4 \
\hline 0.402 & 0.497 & 0.621 & 5 \
\hline 0.335 & 0.473 & 0.564 & 6 \
\hline 0.279 & 0.376 & 0.513 & 7 \
\hline & & & \
\hline
\end{array}$$

Question

Using the following partial table of present value of $1 at compound interest, compute the present value of $20,000 (rounded to nearest dollar) to be received one year from today, assuming an earnings rate of 15%. $$\begin{array} { |l | l | l | l | } 
\hline 20 \% & 15 \% & 10 \% & \text { Year } \
\hline 0.833 & 0.870 & 0.909 & 1 \
\hline 0.694 & 0.756 & 0.826 & 2 \
\hline 0.579 & 0.659 & 0.751 & 3 \
\hline 0.482 & 0.572 & 0.683 & 4 \
\hline 0.402 & 0.497 & 0.621 & 5 \
\hline 0.335 & 0.473 & 0.564 & 6 \
\hline 0.279 & 0.376 & 0.513 & 7 \
\hline & & & \
\hline
\end{array}$$

Quizplus · Accepted Answer

The present value of $1 to be received one year from today at 15% is 0.870. Therefore, the present value of $20,000 to be received one year from today at 15% is $20,000 x 0.870 = $17,400.

Using the Following Partial Table of Present Value of $1