When the rate of interest is 10 percent, the present value of $100 payable in two years is approximately

Question

Quizplus · Accepted Answer

The formula for present value is:

PV = FV / (1 + r)^n

where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods.

Substituting the given values, we get:

PV = 100 / (1 + 0.10)^2
PV = 100 / 1.21
PV ≈ 82.64

Therefore, the closest answer is B, $83.

When the Rate of Interest Is 10 Percent, the Present