The rate used to ﬁnd the present value of a future payment is called the:
A) Simple rate.
B) Discount rate.
C) Compound rate.
D) Future value rate.
E) Loan rate.

Question

Quizplus · Accepted Answer

The rate used to find the present value of a future payment is called the discount rate. It is used to discount the value of a future payment back to its present value. Simple rate, compound rate, future value rate, and loan rate are not appropriate terms in this context.

The Rate Used to ﬁNd the Present Value of a Future