The present value of $1,000 discounted at the rate of 5% per year, to be received at the end of 3 years is equal to

A) $1,000/(1.03)5.
B) $1,000/(1.05)3.
C) $1,000 × (1.05)3.
D) $1,000 - ($1,000) × .03 × 5.

Answer: B

Business

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