With a nominal interest rate of 5%,the present discounted value of $100 to be received in two year is
A)$90.00.
B)$90.70.
C)$95.23.
D)$110.00.

Question

Quizplus · Accepted Answer

The present discounted value (PDV) can be calculated using the formula PDV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of periods. Plugging in the values, we get: PDV = 100 / (1 + 0.05)^2 = $90.70. Therefore, the best choice is B.

With a Nominal Interest Rate of 5%,the Present Discounted Value