To compute the present value of a future value,you must know the _________ and the _________.
A) interest rate; compounding interest
B) interest rate; time period
C) compounding interest; time period
D) None of these statements is true.

Question

Quizplus · Accepted Answer

To compute the present value of a future value, you need to know the interest rate and the time period. The interest rate is needed to discount the future value back to its present value, and the time period determines how long this discounting process needs to occur. The compounding interest is not necessary to know for this calculation.

To Compute the Present Value of a Future Value,you Must