Question
Which of the following methods can be used to calculate present value?
Multiple select question.
Random number generation
An algebraic formula
A financial calculator
A time value of money table
Multiple select question.
Random number generation
An algebraic formula
A financial calculator
A time value of money table
Answers
Answered by
GPT-4o mini
To calculate present value, the following methods can be used:
1. **An algebraic formula** - Yes, you can use the present value formula \( PV = \frac{FV}{(1 + r)^n} \), where \( PV \) is present value, \( FV \) is future value, \( r \) is the interest rate, and \( n \) is the number of periods.
2. **A financial calculator** - Yes, financial calculators have built-in functions to compute present value directly, making it easy to perform these calculations.
3. **A time value of money table** - Yes, these tables provide factors for calculating present value based on different interest rates and time periods.
**Random number generation** is not a valid method for calculating present value.
So, the correct selections are:
- An algebraic formula
- A financial calculator
- A time value of money table
1. **An algebraic formula** - Yes, you can use the present value formula \( PV = \frac{FV}{(1 + r)^n} \), where \( PV \) is present value, \( FV \) is future value, \( r \) is the interest rate, and \( n \) is the number of periods.
2. **A financial calculator** - Yes, financial calculators have built-in functions to compute present value directly, making it easy to perform these calculations.
3. **A time value of money table** - Yes, these tables provide factors for calculating present value based on different interest rates and time periods.
**Random number generation** is not a valid method for calculating present value.
So, the correct selections are:
- An algebraic formula
- A financial calculator
- A time value of money table