If the interest rate is 10%,then $1 received one year from now is worth how much today?
A)$1.10
B)$1
C)91¢
D)90¢

Name: If the interest rate is 10%,then $1 received one year from now is worth how much today? A)$1.10 B)$1 C)91¢ D)90¢
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Question

Quizplus · Accepted Answer

To find out how much $1 received one year from now is worth today, you need to discount it by the interest rate. The formula for discounting is the future value divided by (1 + interest rate). So, $1 / (1 + 0.10) = $1 / 1.10 = 91¢.

If the Interest Rate Is 10%,then $1 Received One Year