Question

What is the present value of $45,000 to be received 50 years from today if the discount rate is 8 percent?

a. $1,147.07
b. $959.46
c. $841.41
d. $1,106.18
e. $1,291.06

Answer 1

Answer: b. $959.46

Explanation:

Present Value = Amount / (1 + rate) ^ n

= 45,000 / ( 1 + 8%)⁵⁰

= 959.455

= $959.46