Question

What is the present value of the future receipts of $2,000, 5 years from now at 10% compounded annually?

Answer 1

P = $ 766.28

Step-by-step explanation:

present value = ?

Future value = $ 2000

time = 5 years

compounded annually at the rate of = 10 %

`A = P + P(1+(r)/(100))^t`

`2000 = P + P(1+(10)/(100))^5`

2000 = P + 1.61 P

2.61 P = 2000

P = $ 766.28

hence, the present value of amount invested to get the future value of $2000 is equal to P = $ 766.28