With a nominal interest rate of 3.5% per year, the present discounted value of $850 to be received in 8 years is:
A) $950.50.
B) $874.50.
C) $748.50.
D) $645.50.
E) $1122.50.

Question

Quizplus · Accepted Answer

The present discounted value (PDV) is calculated using the formula PDV = FV / (1 + r)^n, where FV is the future value, r is the nominal interest rate, and n is the number of years. Plugging in the values: PDV = $850 / (1 + 0.035)^8 = $645.50.

With a Nominal Interest Rate of 3