When the rate of interest is 10 percent, the present value of $100 payable in two years is approximately

Question

Quizplus · Accepted Answer

The formula for present value is:

PV = FV / (1 + r)^n

Where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years.

Using this formula, we can calculate the present value of $100 payable in two years at an interest rate of 10 percent:

PV = $100 / (1 + 0.10)^2 = $82.64

Therefore, the best choice is B: $83.

When the Rate of Interest Is 10 Percent, the Present