The table above shows the interest rates available from investing in risk-free U.S. Treasury securities with different investment terms. If an investment offers a risk-free cash flow of $100,000 in two years' time, what is the present value (PV) of that cash flow?
A) $76,518
B) $114,777
C) $133,906
D) $95,647

Question

The table above shows the interest rates available from investing in risk-free U.S. Treasury securities with different investment terms. If an investment offers a risk-free cash flow of $100,000 in two years' time, what is the present value (PV) of that cash flow?
A) $76,518 
B) $114,777 
C) $133,906 
D) $95,647

Quizplus · Accepted Answer

D) Using FV = $100,000, find the present value (PV) at 2.25% for 2 years.

The Table Above Shows the Interest Rates Available from Investing