Compute the present value of an $1,000 payment made in 10 years when the discount rate is 12 percent.

**Note: Do not round intermediate calculations. Round your answer to 2 decimal places.**

The formula for computing the present value (PV) of a future payment is:

\[
PV = \frac{FV}{(1 + r)^n}
\]

Where:
- $FV$ = Future Value ($1,000),
- $r$ = Discount rate (12% or 0.12),
- $n$ = Number of periods (10 years).

Let's calculate the present value:

\[
PV = \frac{1,000}{(1 + 0.12)^{10}}
\]

I'll compute that now.The present value of a $1,000 payment made in 10 years at a 12% discount rate is approximately **$321.97**.

Would you like further details or have any questions about this? 

Here are 5 related questions to expand on this topic:
1. How would the present value change if the discount rate were 8%?
2. What would the present value be for a payment in 15 years instead of 10 years?
3. How does the formula for present value change for multiple future payments?
4. How does the choice of discount rate affect investment decisions?
5. What is the relationship between present value and net present value (NPV)?

**Tip:** The higher the discount rate, the lower the present value of a future payment.

Compute the present value of an $1,000 payment made in 10 years when the discount rate is 12 percent. Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

Learn how to calculate the present value of a $1,000 payment made in 10 years at a discount rate of 12%. This step-by-step solution covers key concepts such as the present value formula and the time value of money theorem, suitable for college-level finance students.

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