Present Value of a Single Sum What is the present value on January 1, 2019, of $10,000 to be received on January 1, 2023, and discounted at 6% compunded quarterly? Round your answer to two decimal places.
Present Value of a Single Sum
What is the present value on January 1, 2019, of $10,000 to be received on January 1, 2023, and discounted at 6% compunded quarterly?
Round your answer to two decimal places.
If you received $100 today and deposited it into a savings account it would grow over time to be worth more than $100. This fact of financial life is a result of the time value of money, a concept which says it's more valuable to receive $100 now rather than a year from now. To put it another way, the present value of receiving $100 one year from now is less than $100.
Normally we use Present Value (PV) calculations to account for the time value of money in a number of different applications. PV calculations can also tell us such things as how much money to invest right now in return for specific cash amounts to be received in the future, or how to estimate the rate of return on your investments.
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