If the interest rate is 10 percent per year,the present value of $100 in two years is

Question

Quizplus · Accepted Answer

Using the formula for present value, we have:

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 = 100/(1+0.1)^2
PV = 100/1.21
PV = 82.64

Therefore, the present value of $100 in two years with an interest rate of 10 percent per year is $82.64, which corresponds to answer choice B.

If the Interest Rate Is 10 Percent Per Year,the Present