Management Notes

Reference Notes for Management

What is the present value of $6,811 to be received in one year if the discount rate is 6.5 percent?

What is the present value of $6,811 to be received in one year if the discount rate is 6.5 percent?

A. $6,671.13
B. $6,643.29
C. $6,395.31
D. $6,023.58
E. $7,253.72

The Correct Answer for the given question is option C. $6,395.31

 

 

Answer Explanation for Question: What is the present value of $6,811 to be received in one year if the discount rate is 6.5 percent?

The present value can be calculated in following way:

Present Value = FV/ (1+i)^n

                        = 6,811/ (1+0.065)^1

                         = 6, 395.31

Which one of the following variables is the exponent in the present value formula?

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