What is the present value of $1.21 received at the end of two years if the interest rate is 10 percent and compounding is annual?
A) $1.31
B) $1.21
C) $1.10
D) $1.00

Name: What is the present value of $1.21 received at the end of two years if the interest rate is 10 percent and compounding is annual? A) $1.31 B) $1.21 C) $1.10 D) $1.00
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Question

Quizplus · Accepted Answer

The present value (PV) is calculated using the formula PV = FV / (1 + r)^n. Here, FV = $1.21, r = 0.10, and n = 2. So, PV = $1.21 / (1.10)^2 = $1.00.

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