If the interest rate is 12.5%, what is the present value of $200 received in one year?
A)$25.
B)$177.77
C)$197.
D)$225.

Question

Quizplus · Accepted Answer

We can use the formula for present value with compound interest:

Present value = Future value / (1 + r)^n

where r is the interest rate and n is the number of periods.

Substituting the values, 
Present value = 200 / (1 + 0.125)^1 
Present value = 200 / 1.125 
Present value = 177.77

Therefore, the present value of $200 received in one year at an interest rate of 12.5% is $177.77.

If the Interest Rate Is 12