Using the following partial table of present value of $1 at compound interest, determine the present value of $20,000 to be received four years hence, with earnings at the rate of 10% a year. $$\begin{array} { | l | l| l | l | }
\hline 12 \% & 10 \% & 6 \% & \text { Year } \
\hline 0.893 & 0.909 & 0.943 & 1 \
\hline 0.797 & 0.826 & 0 .890 & 2 \
\hline 0.712 & 0.751 & 0.840 & 3 \
\hline 0.636 & 0.683 & 0.792 & 4 \
\hline & & &
\end{array}$$

Question

Using the following partial table of present value of $1 at compound interest, determine the present value of $20,000 to be received four years hence, with earnings at the rate of 10% a year. $$\begin{array} { | l | l| l | l | } 
\hline 12 \% & 10 \% & 6 \% & \text { Year } \
\hline 0.893 & 0.909 & 0.943 & 1 \
\hline 0.797 & 0.826 & 0 .890 & 2 \
\hline 0.712 & 0.751 & 0.840 & 3 \
\hline 0.636 & 0.683 & 0.792 & 4 \
\hline & & &
\end{array}$$

Quizplus · Accepted Answer

The present value of $1 to be received four years hence, with earnings at the rate of 10% a year is 0.683. Therefore, the present value of $20,000 to be received four years hence, with earnings at the rate of 10% a year is $20,000 x 0.683 = $13,660.

Using the Following Partial Table of Present Value of $1