The present value of $10,000 discounted at 5% per year and received at the end of 5 years is

Solution:

Present value = $10,000

Rate of discount per year = 5% = 1 - 0.05 = 0.95

Amount received at the end of 5 years should be found

Consider the formula

Final = Original × Multiplierⁿ

Final = 10,000 × 0.95⁵

By further calculation

Final = 7737.8093

Therefore, the amount received at the end of 5 years is $ 7737.81.

The present value of $10,000 discounted at 5% per year and received at the end of 5 years is

Summary:

The present value of $10,000 discounted at 5% per year and received at the end of 5 years is $ 7737.81.