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 $8,000 (rounded to the nearest dollar) to be received one year from today, assuming an earnings rate of 12%?

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 $8,000 (rounded to the nearest dollar) to be received one year from today, assuming an earnings rate of 12%?

Quizplus · Accepted Answer

Using Table 1, the present value factor for one year at 12% is 0.893.
The present value of $8,000 is $8,000 x 0.893 = $7,144 (rounded to the nearest dollar). Therefore, the best choice is (D).

Below Is a Table for the Present Value of $1