What present amount is equivalent to $100 received at the end of 5 years, given an interest rate of 16%?
A)$47.60
B)$327.40
C)$40.20
D)$163.60
E)$32.30

Question

Quizplus · Accepted Answer

To find the present value of $100 received in 5 years at an interest rate of 16%, we use the present value formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value ($100), r is the annual interest rate (0.16), and n is the number of years (5). Plugging in the values, we get PV = $100 / (1 + 0.16)^5 ≈ $47.60.

What Present Amount Is Equivalent to $100 Received at the End