If the interest rate is 5%, what is the present value of ten dollars received one year from now?
A)$9.50.
B)$10.05.
C)$9.52.
D)$9.77.

Question

Quizplus · Accepted Answer

The formula for present value is: PV = FV / (1 + r)^n
where:
FV = future value
r = interest rate
n = number of periods

Plugging in the given values, we get:
PV = 10 / (1 + 0.05)^1
PV = 9.52

Therefore, the present value of ten dollars received one year from now at an interest rate of 5% is $9.52. The best choice is option C.

If the Interest Rate Is 5%, What Is the Present