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
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?