Question

In: Finance

Compute the present value of a $1,000 deposit at end of year two (2) and another $2,000 deposit at the end of year five (5) if interest rates are seven (7) percent per year.

Compute the present value of a $1,000 deposit at end of year two (2) and another $2,000 deposit at the end of year five (5) if interest rates are seven (7) percent per year.

Group of answer choices

A. $2,632.60

B. $1,525.79

C. $934.58

D. $2,299.41

E. $2,460.37

Solutions

Expert Solution

PV = FV / (1 + r)^t

PV = $1,000/1.07^2 + $2,000/1.07^5

PV = $2,299.41


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