Final answer:
The present value of a future cash flow of $3,000 in thirty years at an interest rate of 14% is approximately $214. The calculation uses the present value formula, which accounts for the time value of money.
Step-by-step explanation:
The student's question is about determining the present value of a future cash flow of $3,000 that is anticipated in thirty years, given an interest rate of 14%. To find the present value, we use the present value formula:
Present Value = Future Value / (1 + interest rate)^number of periods
In this case, the future value is $3,000, the interest rate is 14% (or 0.14 as a decimal), and the number of periods is 30 years. Plugging these values into the formula, we get:
Present Value = $3,000 / (1 + 0.14)^30
Present Value = $3,000 / (1.14)^30
Present Value = $3,000 / (14.026)
Present Value ≈ $214
Thus, the present value of $3,000 received in thirty years at an interest rate of 14% is approximately $214.