, Below is a table for the present value of $1 at Compound interest Year 6% 0.94

Question

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Below is a table for the present value of $1 at Compound interest Year 6% 0.943 0.890 0.840 0.792 0.747 10% 0.909 0.826 0.751 0.683 0.621 129% 0.893 0.797 0.712 0.636 0.567 Below is a table for the present value of an annuity of si at compound interest. Year 69% 0.943 1.833 2.673 3.465 4.212 10% 0.909 1.736 2487 3.170 3.791 12% 0893 1.690 2.402 3.037 3.605 Using the tables above, determine the present value of $40,000.oo (rounded to the nearest dollat) to be received two years from today,assuning an earnings rate of 12%. Select the correct answer 540,000 550,176 $31,880 567,600

Explanation / Answer

Present value of $40000 to be received 2 years from now = $40000 x PV12%,2

= $40000 x 0.797

= $31880

Third option is correct

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