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# The present value of $1,000 to be received in 5 years is ________ if the discount rate is 12.78%.

**Solution:**

We have to calculate the present value

Present Value = Future value/ (1 + r)^{t}

Where future value = $1,000

r is the rate = 12.78% = 0.1278

t is the time = 5 years

By substituting the values in the formula

PV = 1,000/ (1 + 0.1278)^{5}

PV = 1,000/ (1.1278)^{5}

By further calculation,

PV = 1,000/1,825

PV = $548

Therefore, the present value is $548.

## The present value of $1,000 to be received in 5 years is ________ if the discount rate is 12.78%.

**Summary:**

The present value of $1,000 to be received in 5 years is $548 if the discount rate is 12.78%.

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