Which of the following is the correct way to express the value discounting function mathematically?
A)V = M/(1 + k D)
B)M = V/(1 - k D)
C)K = M/(1 - VD)
D)D = V/(1 + k M)

Question

Quizplus · Accepted Answer

The correct way to express the value discounting function is V = M/(1 + k D), where V is the present value, M is the future value, k is the discount rate, and D is the time period. This equation shows how the future value is discounted to obtain its present value. Option B is not correct as it incorrectly assumes that the present value is equal to the future value discounted by the discount rate. Options C and D are also not correct as they incorrectly rearrange the terms in the formula.

Which of the Following Is the Correct Way to Express