To determine the present value of future amount

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Reference no: EM132028628

1. To determine the present value of a future amount, one should _________ the future cash flows.

annuitize

compound

discount

multiply

2. Your aunt places $13,000 into an account earning an interest rate of 7% per year. After five years the account will be valued at $18,233.17. Which of the following statements is correct?

The present value is $13,000, the time period is seven years, the present value is $18,233.17, and the interest rate is 5%.

The future value is $13,000, the time period is five years, the principal is $18,233.17, and the interest rate is 7%.

The principal is $13,000, the time period is five years, the future value is $18,233.17, and the interest rate is 7%.

The principal is $13,000, the time period is seven years, the future value is $18,233.17, and the interest rate is 5%.

Reference no: EM132028628

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