Consider the following timeline:
If the current market rate of interest is 9%,then the present value of this timeline as of year 0 is closest to:
A)$492
B)$637
C)$600
D)$400

Name: Consider the following timeline: If the current market rate of interest is 9%,then the present value of this timeline as of year 0 is closest to: A)$492 B)$637 C)$600 D)$400
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Question

Consider the following timeline: 
If the current market rate of interest is 9%,then the present value of this timeline as of year 0 is closest to:
A)$492 
B)$637 
C)$600 
D)$400

Quizplus · Accepted Answer

A)PV = FV(1 + r)ⁿ 100/(1.09)¹ = 91.74 200/(1.09)² = 168.34 300/(1.09)³ = 231.66 Sum = 491.74 which is approximately $492

Consider the Following Timeline