Answer:
The present value is $0.86.-
Explanation:
Giving the following information:
Future Value (FV)= $1
Number of periods (n)= 3 years
Interest rate (i)= 5% = 0.05
To calculate the present value (PV), we need to use the following formula:
PV= FV/(1+i)^n
PV= 1/(1.05^3)
PV= $0.8634
The present value is $0.86.-
