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

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