Present value: Derek's friend, Jack, is asking to borrow today with a promise to repay $7,418.87 in four years. If Derek could earn 5.45 percent annually on the any investment he makes today, how much would he be willing to lend Jackson today? (Round to nearest dollar.)
A) $6,000
B) $7,035
C) $6,500
D) $7,150

Question

Quizplus · Accepted Answer

The present value of $7,418.87 to be received in four years at 5.45% is $6,000.

Present Value: Derek's Friend, Jack, Is Asking to Borrow Today