What is the present value of $38,000 to be received in 9 years, discounted at 6%?

To find the present value of $38,000 to be received in 9 years, discounted at a rate of 6%, we use the present value formula:

[

PV = \frac{FV}{(1 + r)^n}

]

where:

• ( PV ) is the present value,

• ( FV ) is the future value ($38,000),

• ( r ) is the discount rate (6% or 0.06), and

• ( n ) is the number of years until the payment (9 years).

Substituting the values into the formula:

[

PV = \frac{38000}{(1 + 0.06)^9}

]

Calculating the denominator:

[

(1 + 0.06)^9 = (1.06)^9 \approx 1.689478

]

Now substituting this back into the present value formula:

[

PV \approx \frac{38000}{1.689478} \approx 22,492.14

]

Thus, the present value of receiving $38,000 in 9 years at a discount rate of 6% is approximately $22,492.14.