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What is the present value of a benefit of $1,000, to be obtained 20 years from now, with a discount rate of 3%
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What is the present value of a benefit of $1,000, to be obtained 20 years from now, with a discount rate of 3%

User Andrii Starusiev
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1 Answer

4 votes

Answer:

The present value is $553.68

Step-by-step explanation:

Giving the following information:

Future Value (FV)= $1,000

Number of periods= 20 years

Interest rate= 3%

To calculate the Present Value (PV), we need to use the following formula:

PV= FV/(1+i)^n

PV= 1,000 / (1.03^20)

PV= $553.68

The present value is $553.68

User K S
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4.6k points
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