Question

What is the present value today of $2,300 received two years from now with a rate of return equal to 4%?

Answer 1

Answer:

present value = $2126.47

Explanation:

given data

future value = $2,300

time t = 2 year

rate of return r = 4%

solution

we get here present value that is express as

future value = present value  ×  $(1+r)^{t}$  ..............1

put here value and we get

$2,300 =  present value  × $(1+0.04)^{2}$

present value = $\frac{2300}{1.04^2}$

present value = $2126.47