Which one of the following variables is the exponent in the present value formula?
A) Present value
B) Future value
C) Interest rate
D) Number of time periods
E) There is no exponent in the present value formula.

Question

Quizplus · Accepted Answer

The present value formula is: PV = FV / (1 + r)^n, where "n" is the exponent or power to which (1 + r) (1 plus the interest rate) is raised. Therefore, the number of time periods is the exponent in the present value formula.

Which One of the Following Variables Is the Exponent in the Present