Answer:
The present value of $500 in one year is $434.78 and the present value of $1,000 in 5 years is $497.18
Explanation:
Hi, we need to use the following formula
Present Value = Future Value/ (1+Discount Rate)^years
Therefore, in the case of $500 in one year.
Present Value = $500/(1+0.15)^1 = $434.78
And for $1,000 in 5 years
Present Value = $1,000/(1+0.15)^5 = $497.18
Notice that the discount rate (15%) has to be used in its decimal form, that is 0.15 (which you can get by dividing 15/100).
Best of luck.
Best of luck
