At which interest rate is the present value of $196.85 three years from today equal to $175 today?
A)2 percent
B)4 percent
C)6 percent
D)8 percent

Name: At which interest rate is the present value of $196.85 three years from today equal to $175 today? A)2 percent B)4 percent C)6 percent D)8 percent
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Question

Quizplus · Accepted Answer

The present value formula is PV = FV / (1 + r)^n. Plugging in the values: $175 = $196.85 / (1 + r)^3. Solving for r gives approximately 4 percent.

At Which Interest Rate Is the Present Value of $196