If i is the interest rate per period, which of the following represents the present value, denoted PV, of $100 in period n?
A)PV = $100in
B)PV = $1001/n
C)PV = $100/(1 + i)n
D)PV = $100 × (1 + i)n

Question

Quizplus · Accepted Answer

The present value formula is based on discounting future cash flows back to the present at a given interest rate. The formula for present value of $100 in period n, denoted PV, is PV = $100/(1+i)^n. This formula takes into account both the time value of money and the interest rate in determining the present value.

If I Is the Interest Rate Per Period, Which of the Following