volume_mute
A company is considering an upgrade with a Discount Rate of 10%. If the expected benefit in Year 2 is $121,000, what is the Present Value (PV) of that benefit today?
publish date: 2026/03/08 06:46:19.344546 UTC
volume_mute
Correct Answer
$100,000
Explanation
\[\text{PV} = \frac{\text{Future Value}}{(1+n)^n}\]
Future Value = 120,000
n = 2
r = discount rate = 10% = 0.1
\[\frac{121,000}{(1.10)^2} = \frac{121,000}{1.21} = 100,000\]
Reference
go-math-science.com