If you want to know the present value of $4000 in two years and the annual interest rate is 5%,what formula can you use?
A) Present value = $4000 / (0.05) × 2.
B) Present value = $4000 / (1 + 0.05) ².
C) Present value = $4000 × (1 + 0.05) ².
D) Present value = $4000 × (1 + 0.05 ) / 2.
Correct Answer:
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