Final answer:
The present value of a $2000 payment to be received in 32 years with a discount rate of 10% is approximately $148.64.
Step-by-step explanation:
To calculate the present value of a $2000 payment to be received in 32 years at a 10 percent discount rate, we will use the formula for present value, PV = FV / (1 + r)^n, where PV is present value, FV is future value, r is the discount rate, and n is the number of periods. we need to discount the future cash flow by the appropriate discount rate
Using this formula, we get PV = $2000 / (1 + 0.10)^32. So, let's compute the present value:
PV = $2000 / (1.10)^32
PV = $2000 / (13.455)
PV= $148.64
Therefore, the present value of the investment is approximately $148.64.