Question

Present and future value tables of 1 at 9% are presented below. PV of $1 FV of $1 PVA of $1 FVAD of $1 FVA of $1 1 0.91743 1.09000 0.91743 1.0900 1.0000 2 0.84168 1.18810 1.75911 2.2781 2.0900 3 0.77218 1.29503 2.53129 3.5731 3.2781 4 0.70843 1.41158 3.23972 4.9847 4.5731 5 0.64993 1.53862 3.88965 6.5233 5.9847 6 0.59627 1.67710 4.48592 8.2004 7.5233 How much must be invested now at 9% interest to accumulate to $19,000 in two years?

Multiple Choice

$15,992.

$11,329.

$11,062.

$15,725.

Answer 1

$15,992

Step-by-step explanation:

The computation of the present value is shown below:

Amount or Future value = Present value × (1 + rate)^number of years

$19,000 = Present value × (1 + 0.09)^2

$19,000 = Present value × (1.09)^2

$19,000 = Present value × 1.1881

So, the present value would be $15,992

We simply applied the above formula so that the accurate value could come.