What is the present value of $1,000 received 2 years from today if the nominal interest rate is 9% and compounded monthly?
A) $842
B) $914
C) $833
D) $836

Question

Quizplus · Accepted Answer

The present value is calculated using the formula PV = FV / (1 + r/n)^(nt), where FV is the future value, r is the nominal interest rate, n is the number of compounding periods per year, and t is the number of years. Plugging in the values: PV = 1000 / (1 + 0.09/12)^(12*2) = $836.

What Is the Present Value of $1,000 Received 2 Years