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What+is+the+present+value+of+$1000+to+be+received+in+three+years+if+the+interest+rate+is+15%?

1 Answer

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Final answer:

The present value of $1000 to be received in three years at an interest rate of 15% is approximately $652.68.

Step-by-step explanation:

The present value of $1000 to be received in three years can be calculated using the present value formula:

Present Value = Future Value / (1 + Interest Rate)^Number of Years

Substituting the given values:

Present Value = $1000 / (1 + 0.15)^3

Calculating:

Present Value = $1000 / (1.15)^3

Present Value ≈ $652.68

Therefore, the present value of $1000 to be received in three years at an interest rate of 15% is approximately $652.68.

User Cong Nguyen
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