What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent?
A)$453.51
B)$500.00
C)$476.25
D)$550.00

Question

Quizplus · Accepted Answer

The present value (PV) can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($500), r is the annual interest rate (0.05), and n is the number of years (2). Plugging in the values, we get PV = $500 / (1 + 0.05)^2 = $453.51.

What Is the Present Value of $500