Your textbook costs $90, and you can resell it in one year for $45. If the annual interest rate is 10%, then the present value of the textbook's resale value (to the nearest dollar) is:

Question

Quizplus · Accepted Answer

The present value of the resale value of the textbook one year from now can be calculated using the formula:
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.

In this case, FV is $45, r is 10%, n is 1 year, and we want to find PV. Plugging in the numbers, we get:
PV = $45 / (1 + 0.1)^1 = $41

Therefore, the present value of the resale value of the textbook is $41, which is the best choice.

Your Textbook Costs $90, and You Can Resell It in One