What is the present value of $100 two years from now at an interest rate of 5%?

Question

Quizplus · Accepted Answer

The present value of $100 two years from now at an interest rate of 5% is $90.70. This is because the present value of a future sum of money is the amount of money that, if invested today at a given interest rate, will grow to the future sum at the end of the investment period. In this case, the future sum is $100, the interest rate is 5%, and the investment period is two years. Using the formula for present value, we can calculate the present value as follows:PV = FV / (1 + r)^nwhere:PV is the present valueFV is the future valuer is the interest raten is the number of yearsPlugging in the values we have:PV = 100 / (1 + 0.05)^2PV = 100 / 1.1025PV = $90.70

What Is the Present Value of $100 Two Years from Now