Which of the following statements is true?
A)The process of accumulating interest on interest is referred to as discounting.
B)The higher the discount rate,the higher the present value.
C)If interest is 12% compounded annually,$1,200 due one year from today is equivalent to $1,000 today.
D)If interest is 10% compounded annually,$1,100 due one year from today is equivalent to $1,000 today.

Question

Quizplus · Accepted Answer

The present value of $1,100 due one year from today at a 10% interest rate is $1,000, as $1,100 / (1 + 0.10) = $1,000.

Which of the Following Statements Is True