What is the total present value of two payments of $100 paid to you, one a year from now, and the second two years from now, if the rate of interest is 5%?

Question

Quizplus · Accepted Answer

The present value of the first payment in a year would be $95.24 ($100/(1+0.05)^1) and the present value of the second payment in two years would be $90.70 ($100/(1+0.05)^2).
The total present value would be the sum of both present values, which is $185.94.

What Is the Total Present Value of Two Payments of $100