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Using a discount rate of 10 percent, the present value of a $2,500 benefit received 5 years from now is $1,552.79.
Given the discount rate of 10%, the present value(PV) of a $2,500 benefit received five years from now can be calculated using the formula given below:
[tex]PV = \frac{CF}{ (1 + r) n}[/tex]
PV = Present value
CF = Cash flow = $2500
n = Number of years between the time of the future cash flow and the present day.
r = Discount rate = 10% = 0.1
present value(PV) of a $2,500 benefit received five years from now =
[tex]PV = \frac{2500}{ (1 + 0.1) 5}[/tex]
PV = $1,552.79
Hence, The present value of a $2,500 benefit received in five years, at a 10% discount rate, is $1,552.79.
To know more about discount rate refer to: https://brainly.com/question/13660799
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