If the present value of $600,expected one year from today,is $400,what is the one-year discount rate?
A)15%
B)20%
C)25%
D)50%

Name: If the present value of $600,expected one year from today,is $400,what is the one-year discount rate? A)15% B)20% C)25% D)50%
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Question

Quizplus · Accepted Answer

The present value (PV) formula is PV = FV / (1 + r), where FV is the future value and r is the discount rate. Solving for r: $400 = $600 / (1 + r) gives r = 0.50 or 50%.

If the Present Value of $600,expected One Year from Today,is