Compute the present value of $5,000 to be received one year from today if the interest rate is 10%, compounded annually.

Present Value of $1
Periods
8%/10%/12%/14%
1/0.9259/0.9091/0.8929/0.8772
2/0.8573/0.8264/0.7972/0.7695
3/0.7938/0.7513/0.7118/0.6750
4/0.7350/0.6830/0.6355/0.5921

Compute the present value of $5,000 to be received one year from today if the interest rate is 10%, compounded annually.



A) $4,545.50
B) $5,050.00
C) $4,500.00
D) $5,500.00





Answer: A


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