Assume the current interest rate is 20%. The present value of $500 in one year would be

Name: Assume the current interest rate is 20%. The present value of $500 in one year would be
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Quizplus · Accepted Answer

The present value (PV) is calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($500), r is the interest rate (20% or 0.20), and n is the number of periods (1 year). Plugging in the values gives PV = $500 / (1 + 0.20)^1 = $500 / 1.20 = $416.67, which rounds to $417.

Assume the Current Interest Rate Is 20