The formula for present value allows investors to:
A) convert a given number of dollars in the future into its present equivalent.
B) determine the future impact of inflation on a present amount of money.
C) know which financial assets will provide the greatest future returns.
D) do all of these.

Question

Quizplus · Accepted Answer

The formula for present value helps investors convert a specified amount of money in the future into its current value. This is useful when making investment decisions or when evaluating the value of an investment opportunity. Knowing the present value allows investors to assess the potential returns and make informed decisions. Options B and C are not accurate descriptions of how the present value formula is used.

The Formula for Present Value Allows Investors To