What is the present value of a $1,600 payment made in five years when the discount rate is 10 percent?

Present value is $993.47

Step-by-step explanation:

PV = present value

Fv = future value = $1,600

Discount (i) = 10%

N = Years = 5

The formula for this is given by:

PV = FV / (1 + i) ^N

PV = $1600 / (1 + 0.10) ^5

PV = $1600/1.1^5

PV = $1600/1.61051

PV = $993.47