If the present value of $1.00 received n years from today at an interest rate of r is 0.621, then what is the future value of $1.00 invested today at an interest rate of r% for n years?
A) $1.00
B) $1.61
C) $1.621
D) Not enough information to solve the problem

Question

Quizplus · Accepted Answer

The present value of $1.00 received in the future is given by the formula PV = FV / (1 + r)^n. If PV = 0.621, then FV = 1.00. Solving for (1 + r)^n gives (1 + r)^n = 1 / 0.621 = 1.61. Thus, the future value of $1.00 invested today is $1.61.

If the Present Value of $1