Using slightly different notation than in the text, we could say that the present value (PV) of a payment n years in the future (FV) , given interest rate (r) , is given by the equation:
A) PV = FVⁿ.
B) PV = 1 ÷ FVⁿ.
C) PV = FV ÷ (1 + r) .
D) PV = FV ÷ (1 + r) ⁿ.
Correct Answer:
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