Using the Following Partial Table of Present Value of $1

question 21

Multiple Choice

Using the following partial table of present value of $1 at compound interest, determine the present value of $20,000 to be received four years hence with earnings at the rate of 12% a year: ? $$\begin{array} { c c c c } \text { Year } & 6 \% & 10 \% & 12 \% \\\hline 1 & 0.943 & 0.909 & 0.893 \\2 & 0.890 & 0.826 & 0.797 \\3 & 0.840 & 0.751 & 0.712 \\4 & 0.792 & 0.683 & 0.636\end{array}$$

• A) $13,660
• B) $15,840
• C) $12,720
• D) $10,400

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Definitions:

Percentage

is a proportion or share expressed as a fraction of 100, used to describe relative quantities or to compare parts of a whole.

Healthiest

Describes the optimal state of physical and mental well-being, often associated with lifestyle choices that contribute to longevity and quality of life.

Happiest

Experiencing or characterized by the highest degree of pleasure, satisfaction, or contentment.

Widow

A woman whose spouse has died and who has not remarried.