Below is a table for the present value of $1 at Compound interest. Year 6% 10% 1

Question

Below is a table for the present value of $1 at Compound interest.
Year 6% 10% 12%
1 .943 .909 .893
2 .890 .826 .797
3 .840 .751 .712
4 .792 .683 .636
5 .747 .621 .567
Below is a table for the present value of an annuity of $1 at compound interest.
Year 6% 10% 12%
1 .943 .909 .893
2 1.833 1.736 1.690
3 2.673 2.487 2.402
4 3.465 3.170 3.037
5 4.212 3.791 3.605

Using the tables above, what would be the present value of $15,000 (rounded to the nearest dollar) to be received three years from today, assuming an earnings rate of 10%?
a. $11,265
b. $13,500
c. $6,031
d. $37,305

Explanation / Answer

Present value of $1 at compound interest of 10% for 3 years is .751 Present value of $15,000 is 15,000*.751 = 11265 answer: a. $11,265

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