UTS 601

A man sell hard disk external case. And The Man has an opportunity to receive $300 two year from now. If she can earn 6% on her sale in the normal course of events, what is the most she should pay now for this opportunity?

We can know :
FV2 = $300, n = 2 and i = 0.06


PV = FVn/( 1 + i )^n


Answer :
PV = $300/〖( 1 + 0.06 )〗^2

= $266.99

The value today (“present value”) of $300 received two year from today, given an opportunity cost of 6% is $266.99.