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The present value of $60,000 to be received in one year, at 6% compounded annually, is...

The present value of $60,000 to be received in one year, at 6% compounded annually, is (rounded to nearest dollar) ______ .
Use the present value table in Exhibit 8.

a.$56,075

b.$56,604

c.$53,572

d.$60,000

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Answer #1

Present Value = Amount *1/ (1+ Rate of Interest)^ time

= $ 60,000 *1/ (1+6%)^1

= $ 60,000 * 1/1.06

= $ 60,000* 0.94340

= $ 56,604

Answer : b.$56,604

Note:

Value of 6% for 1 year in  table in Exhibit 8 = 0.94340

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