If the interest rate is 3 percent,the present value of $900 received at the end of four years is:
A) $792.00.
B) $799.64.
C) $873.79.
D) $927.40.

Question

Quizplus · Accepted Answer

Using the formula for present value of a future amount:
PV = FV / (1 + r)^n
where PV is the present value, FV is the future amount, r is the interest rate and n is the number of years.

Plugging in the given values, we get:
PV = 900 / (1 + 0.03)^4
PV = 900 / 1.1255
PV = $799.64

Therefore, the best choice is B.

If the Interest Rate Is 3 Percent,the Present Value of $900