Consider the following time line:
If the current market rate of interest is 8%,then the present value of this timeline is closest to:
A) $1000
B) $857
C) $860
D) $926

Name: Consider the following time line: If the current market rate of interest is 8%,then the present value of this timeline is closest to: A) $1000 B) $857 C) $860 D) $926
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Question

Consider the following time line: 
If the current market rate of interest is 8%,then the present value of this timeline is closest to:
A) $1000 
B) $857 
C) $860 
D) $926

Quizplus · Accepted Answer

B) PV = FV / (1 + r)ⁿ = 1000 / (1.08)² = 857.34 or approximately $857

Consider the Following Time Line