If the interest rate is 12%, what is the 2-year discount factor?
A) 0.7972
B) 0.8929
C) 1.2544
D) None of the above

Name: If the interest rate is 12%, what is the 2-year discount factor? A) 0.7972 B) 0.8929 C) 1.2544 D) None of the above
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Question

Quizplus · Accepted Answer

The 2-year discount factor can be calculated using the formula: 1/(1 + r)^n, where r is the interest rate and n is the number of years. Plugging in the values, we get: 1/(1 + 0.12)^2 = 0.7972. Therefore, the answer is choice A.

If the Interest Rate Is 12%, What Is the 2-Year