2. If you were to receive $15,550 12 years in the future, how much would it be worth today if discounted at 7% ? (1 point)
Future value = $15,550
Time period (n) = 12 year
Interest rate (i) = 7%
Present value = ?
Present value = Future value x PVF (i, n)
= 15,550 x PVF (7%, 12)
= 15,550 x 0.44401
= $6904.36 (Exact figure may be slightly different due to rounding off)
Hence, Present value = $6904.36
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