Final answer:
The present value of $300 to be received in 8 years with a 10% rate of return is approximately $140.03, calculated using the PV formula: PV = FV / (1 + ROR)^N.
Step-by-step explanation:
The student is asking how to calculate the present value of a future sum of money, known as Future Value (FV), using a given rate of return, known as the Rate of Return (ROR), and a certain number of periods, here noted as years. This concept is a fundamental aspect of time value of money in financial mathematics. To calculate the present value (PV), the formula to use is PV = FV / (1 + ROR)N, where N is the number of periods or years in this case.
Using the provided values, the present value can be calculated as follows:
PV = $300 / (1 + 0.10)8
= $300 / (1.10)8
= $300 / 2.14358881
= approximately $140.03
Therefore, the present value of $300 to be received in 8 years at a rate of return of 10% is approximately $140.03.