If the interest rate is 7.5 percent,a dollar received a year from now has a present value of

Question

Quizplus · Accepted Answer

The present value formula is 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 periods. In this case, n=1 since it's one year from now, r=7.5%, FV=1. Plugging in the values, we get PV = 1 / (1 + 0.075)^1 = $0.93. Therefore, the best choice is B.

If the Interest Rate Is 7