What is the present value of $888 in one year if the current rate of interest is five percent?
A)$4,440
B)$845.71
C)$177.60
D)none of these

Question

Quizplus · Accepted Answer

The present value is the amount that would have to be invested now at the given interest rate to equal the future amount. Using the formula for present value:
Present Value = Future Value / (1 + Interest Rate)^Number of Periods
Plugging in the given values, we get:
Present Value = $888 / (1 + 0.05)^1
Present Value = $845.71 (rounded to the nearest cent)

What Is the Present Value of $888 in One Year