The rate of return is 10% and the cash to be received in one year is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest: $$\begin{array} { | l | l | l | l | }
\hline 12 \% & 10 \% & 6 \% & \text { Year } \
\hline 0.893 & 0.909 & 0.943 & 1 \
\hline 0.797 & 0.826 & 0.890 & 2 \
\hline 0.712 & 0.751 & 0.840 & 3 \
\hline 0.636 & 0.683 & 0.792 & 4 \
\hline & & &
\end{array}$$

Question

The rate of return is 10% and the cash to be received in one year is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest: $$\begin{array} { | l | l | l | l | } 
\hline 12 \% & 10 \% & 6 \% & \text { Year } \
\hline 0.893 & 0.909 & 0.943 & 1 \
\hline 0.797 & 0.826 & 0.890 & 2 \
\hline 0.712 & 0.751 & 0.840 & 3 \
\hline 0.636 & 0.683 & 0.792 & 4 \
\hline & & &
\end{array}$$

Quizplus · Accepted Answer

The present value is calculated by multiplying the cash to be received by the present value factor for the given rate and time. Here, $10,000 * 0.909 = $9,090.

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