Question

How much would $10,000 due in 20 years be worth today if the discount rate were 6.5%?

Answer 1

PV= $2,837.97

Step-by-step explanation:

Giving the following information:

Future value= $10,000

Number of periods= 20 years

Interest rate= 6.5% compounded annually

To calculate the present value, we need to use the following formula:

PV= FV/(1+i)^n

PV= 10,000/(1.065^20)

PV= $2,837.97