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: If the Current Market Rate