With a nominal interest rate of 10% per year,the present discounted value of $200 to be received in two years is
A)$82.64.
B)$90.91.
C)$165.29.
D)$181.82.
E) $220.00.

Question

Quizplus · Accepted Answer

We can use the formula

Present value = Future value / (1+ r)^n

where 
r = nominal interest rate per year = 10%
n = number of years = 2
Future value = $200

Plugging in the values, we get:

Present value = 200 / (1 + 0.1)^2
= 200 / 1.21
= $165.29

Therefore, the present discounted value of $200 to be received in two years is $165.29, which is given by choice (C).

With a Nominal Interest Rate of 10% Per Year,the Present