Which of the following is the correct expression for finding the present value of a $500 payment two years from today if the interest rate is 6 percent?
A) $500/1.06)2
B) $500 - 5001.06)2
C) $500/1.02)6
D) None of the above is correct.

Question

Quizplus · Accepted Answer

The present value (PV) of a future payment is calculated using the formula PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of periods. Here, FV is $500, r is 0.06, and n is 2, which matches option A.

Which of the Following Is the Correct Expression for Finding