Given a discount rate of 10 percent, the present value of receiving $100,000 two years in the future is

Question

Quizplus · Accepted Answer

The formula for calculating present value is: PV = FV / (1 + r)^n, where PV is present value, FV is future value, r is the discount rate, and n is the number of years. 
Substituting the given values, 
PV = $100,000 / (1 + 0.10)^2
PV = $100,000 / 1.21
PV = $82,645.45 
Therefore, the present value of receiving $100,000 two years in the future with a discount rate of 10 percent is $82,645 (rounded to the nearest dollar).

Given a Discount Rate of 10 Percent, the Present Value