Assuming an interest rate of 10%, what is the present value of $1,000 in benefits one year from today?
A) $1,210
B) $909
C) $1,000
D) $2,100

Question

Quizplus · Accepted Answer

To calculate the present value, we need to use the formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the interest rate and n is the number of years. Plugging in the values we have: PV = 1000 / (1 + 0.10)^1 = 1000 / 1.10 = $909. Therefore, the best choice is B.

Assuming an Interest Rate of 10%, What Is the Present