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zheka24 [161]
3 years ago
14

The present value of $1,000 to be received in 5 years is ________ if the discount rate is 12.78%. Group of answer choices $687 $

494 $368 $548
Business
1 answer:
saul85 [17]3 years ago
5 0

Answer:

$548

Explanation:

Calculation for the present value

Using this formula

= P / ( 1 + r ) ^ t

Where,

P represent Principal=1,000

r represent rate=12.78%

t represent Time= 5 years

Let plug in the formula

P=$1,000/(1+0.1278)^5

P=$1,000/(1.1278)^5

P=$1,000/1.825

P=$548

Therefore the present value of $1,000 to be received in 5 years is $548 if the discount rate is 12.78%.

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