Which of the following equations shows how we can compute the value today (P₀) of an amount (P₁) that will be paid a year hence?
A) P₀(1+r) = P₁
B) P₀ = P₁/ (1+r)
C) P₀ = Pn/(1+r) ⁿ⁻¹
D) none of the above are correct.
Correct Answer:
Verified
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