What is the future value in two years of $100 saved today and the present value of a promise of $100 to be paid two years from today if the interest rate is 10%?
A)$121.00, about $82.65
B)$121.00, $80.00
C)$120.00, about $82.65
D)$120,00, $80.00

Question

Quizplus · Accepted Answer

The future value of $100 saved today at a 10% interest rate for two years is $100 * (1 + 0.10)^2 = $121.00. The present value of $100 to be paid in two years at a 10% interest rate is $100 / (1 + 0.10)^2, which is approximately $82.65.

What Is the Future Value in Two Years of $100