If the interest rate is five percent, the present value of $200 received at the end of five years is:
A)$121.34.
B)$156.71.
C)$176.41.
D)$132.62.

Question

Quizplus · Accepted Answer

The present value (PV) is calculated using the formula PV = FV / (1 + r)^n, where FV is the future value ($200), r is the interest rate (0.05), and n is the number of years (5). Plugging in the values, PV = 200 / (1.05)^5 = $156.71.

If the Interest Rate Is Five Percent, the Present Value