An investor wants to know how much she must deposit today to accumulate $50,000 in 10 years, assuming a 6% annual return compounded annually. Which concept BEST describes this calculation?

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Multiple choice — select the best answer

AInternal rate of return
BNet present value of a project
CFuture value of an annuity
DPresent value of a lump sum

✓ Correct answer: D. Present value of a lump sum Discounting a known future lump sum back to today using a required rate of return is the definition of present value (PV) of a lump sum, expressed as PV = FV / (1 + r)^n.

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Topic: Uniform Investment Adviser Law

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An investor wants to know how much she must deposit today to accumulate $50,000 in 10 years, assuming a 6% annual return compounded annually. Which concept BEST describes this calculation?

Related questions — Uniform Investment Adviser Law

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