A trust will provide $12,000 to a county library at the beginning of each 3-month period for the next 2.5 years. If the money is worth an annual rate of 6.8%, compounded quarterly, find the amount in the trust when it begins.  Round your answer to the nearest cent.     a. $111,364.28   b. $85,257.67   c. $352,106.39   d. $284,945.37   e. $246,873.08

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.