Asked by
Michelle Romero
on Nov 13, 2024
Verified
The present value of $40,000 to be received in two years, at 12% compounded annually, is (rounded to nearest dollar)
A) $31,888
B) $48,112
C) $8,112
D) $40,000
Present Value
The present valuation of money to be received in the future or recurrent cash inflows, accounting for a chosen rate of interest.
Compounded Annually
Interest on an investment or loan calculated once a year, where each year's interest payment includes interest on the original principal and on the accumulated interest of previous periods.
- Understand the concept and calculation of present value for future cash flows.
Verified Answer
MM
Learning Objectives
- Understand the concept and calculation of present value for future cash flows.