Answer:
Present value is $993.47
Step-by-step explanation:
PV = present value
Fv = future value = $1,600
Discount (i) = 10%
N = Years = 5
The formula for this is given by:
PV = FV/(1 + i)^N
PV = $1600/(1 + 0.10)^5
PV = $1600/1.1^5
PV = $1600/1.61051
PV = $993.47
