whats the present value of 850.00 made in 10 years with a discount rate of 12%
To calculate the present value of a future cash flow, such as the $850.00 made in 10 years with a discount rate of 12%, you can use the formula for present value:
Present Value = Future Value / (1 + Discount Rate)^Number of Periods
In this case, the Future Value is $850.00, the Discount Rate is 12%, and the Number of Periods is 10 years.
Let's plug in these values into the formula:
Present Value = $850.00 / (1 + 0.12)^10
To solve the equation, we need to evaluate the expression inside the parentheses first:
(1 + 0.12)^10 = 1.12^10 ≈ 3.105
Now, we can substitute this value back into the original formula:
Present Value = $850.00 / 3.105 ≈ $273.36
Therefore, the present value of $850.00 made in 10 years with a discount rate of 12% is approximately $273.36.