If the interest rate is 8 percent,then the present discounted value of $100 to be received two years from now is closest to
A)$128.00.
B)$116.00.
C)$86.00.
D)$96.00.

Question

Quizplus · Accepted Answer

The present discounted value (PDV) is calculated using the formula PDV = F / (1 + r)^n, where F is the future value ($100), r is the interest rate (0.08), and n is the number of years (2). Plugging in the values gives PDV = $100 / (1 + 0.08)^2 = $100 / 1.1664 = approximately $85.73, which is closest to $86.00.

If the Interest Rate Is 8 Percent,then the Present Discounted