The proper equation to use in calculating the present discounted value of a sum F received in two years and again in four years is

Question

Quizplus · Accepted Answer

The present discounted value of receiving F in two years is F/(1+r)^2, and the present discounted value of receiving F in four years is F/(1+r)^4. The total present discounted value is therefore F/(1+r)^2 + F/(1+r)^4, which can be simplified to F(1/(1+r)^2 + 1/(1+r)^4). Choice C is the only option that matches this equation.

The Proper Equation to Use in Calculating the Present Discounted