If the interest rate is 3%, the present value of $900 received at the end of 4 years is:
A)$792.00
B)$799.64.
C)$873.79.
D)$927.40

Question

Quizplus · Accepted Answer

We can use the formula: 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. 
Substituting the given values, we get: 
PV = 900/(1+0.03)^4 
PV = 900/1.1255 
PV = $799.64 (rounded to the nearest cent)

Therefore, the best choice is B.

If the Interest Rate Is 3%, the Present Value of $900