A contract calls for a lump sum payment of 120000 What is th

A contract calls for a lump sum payment of $120,000. What is the present value of the contract assuming the payment is due in eight years and the current market rate of interest is 6% compounded annually.

Present value = FV (1/(1+r)n) FV = Future Value r= rate of return n = number of periods Present Value = 120,000(1/(1+0.06)8) = 120,000 X 0.627412 = 75,289.44 ~ $75,289