If the present value of $1.00 received n years from today at an interest rate of r is 0.3855,then what is the future value of $1.00 invested today at an interest rate of r% for n years?
A)$1.3855
B)$2.594
C)$1.701
D)not enough information is given to solve the problem

Question

Quizplus · Accepted Answer

The present value formula is:

PV = FV/(1+r)^n

Solving for FV, we get:

FV = PV*(1+r)^n

Substituting the given values, we get:

FV = 1*(1+r)^n / 0.3855

Simplifying, we get:

FV = 2.594(r% interest rate for n years)

Therefore, the answer is B.

If the Present Value of $1