At which interest rate is the present value of $135.20 two years from today equal to $125 today?
A) 2 percent
B) 4 percent
C) 6 percent
D) 8 percent

Name: At which interest rate is the present value of $135.20 two years from today equal to $125 today? A) 2 percent B) 4 percent C) 6 percent D) 8 percent
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Question

Quizplus · Accepted Answer

The present value formula is PV = FV / (1 + r)^n. Solving for r when PV = $125, FV = $135.20, and n = 2 gives approximately 4 percent.

At Which Interest Rate Is the Present Value of $135