At which interest rate is the present value of $260.10 two years from today equal to $250 today?
A)2 percent
B)3 percent
C)4 percent
D)5 percent

Name: At which interest rate is the present value of $260.10 two years from today equal to $250 today? A)2 percent B)3 percent C)4 percent D)5 percent
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Question

Quizplus · Accepted Answer

The present value formula is PV = FV / (1 + r)^n. Plugging in the values: $250 = $260.10 / (1 + r)^2. Solving for r gives approximately 2 percent.

At Which Interest Rate Is the Present Value of $260