What is the present value of a payment of $200 to be made one year from today if the interest rate is 10 percent?
A)$180
B)$181.82
C)$220
D)$222.22

Question

Quizplus · Accepted Answer

The present value of the payment can be calculated using the formula: PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the interest rate, and n is the number of periods. Plugging in the values, we get PV = $200 / (1 + 0.10)^1 = $181.82. Therefore, the best choice is B.

What Is the Present Value of a Payment of $200