Question

What is the equivalent present amount to an accumulation of $375,000 17 years from now at...

What is the equivalent present amount to an accumulation of $375,000 17 years from now at 9% interest?

(a). $78,443

(b). $86,652

(c). $90,776

(d). $80,423

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Homework Answers

Answer #1

The correct option ''B'' $86,652

ExplanationIn:- the above question, We have to find the Equivalent present amount. Which can be found by the following formula:

PV = FV *(1 + i)(-N)

Here,

PV= Present value = TO FIND

FV = Future value = $375,000

i = interest rate = 9% = 0.09

N = Time [No. of years] = 17 years

Substuting the respective value in the formula:

PV = FV *(1 + i)(-N)

PV = 375,000 * (1 + 0.09)(-17)

PV = 375,000 * (1.09)(-17)

PV = 86652.4413

Hence, the present value is $86652,4413

So, the correct option is ''B'' $86,652

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