To compute the present value of a future amount, you must know the _______ and the _______.
A)interest rate; compounding interest
B)interest rate; time period
C)compounding interest; time period
D)None of these are true.

Question

Quizplus · Accepted Answer

The present value of a future amount is calculated using the interest rate and the time period. The interest rate determines how much the future amount is discounted to get its present value, and the time period indicates how long until the future amount is received.

To Compute the Present Value of a Future Amount, You