With a constant nominal interest rate equal to i,the present discounted value of $1.00 to be received 4 years from today is equal to
A)1 + i.
B)i⁴.
C)(1 + i)⁴.
D)1 / (1 + i)⁴.
E) 4(1 + i).

Question

Quizplus · Accepted Answer

The formula for present discounted value is: 
Present Discounted Value = (Future Value) / (1 + interest rate)^n
Where n is the number of periods (in this case, 4 years) between the present and future value. 
Plugging in the values given in the question: 
Present Discounted Value = $1.00 / (1 + i)^4
Therefore, the answer is D, 1 / (1 + i)^4.

With a Constant Nominal Interest Rate Equal to I,the Present