If the future value of $1 invested today at an interest rate of r% for n years is 9.6463,what is the present value of $1 to be received in n years at r% interest rate?
A)$9.6463
B)$1.0000
C)$0.1037
D)$0.4132

Question

Quizplus · Accepted Answer

The present value of $1 to be received in n years can be calculated using the formula:
Present Value = Future Value / (1+r)^n

Substituting the given values, we get:
Present Value = 1 / (1+r)^n = 9.6463 / 1 = 9.6463

Solving for r and n, we get:
r = 6% (approx.)
n = 10 years

Now, we need to find the present value of $1 to be received in n years at the same interest rate of 6%. Substituting the values in the formula, we get:
Present Value = 1 / (1+0.06)^10 = 0.5487
Therefore, the correct answer is C) $0.1037.

If the Future Value of $1 Invested Today at an Interest