Which of the following is the correct expression for finding the present value of a $500 payment two years from today if the interest rate is 6 percent? A)$500/(1.06)² B)$500 - 500(1.06)² C)$500/(1.02)⁶ D)None of the above is correct.

Question

Quizplus · Accepted Answer

The present value (PV) formula is PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of periods. Here, FV is $500, r is 0.06, and n is 2, so the correct expression is $500/(1.06)^2.

Which of the Following Is the Correct Expression for Finding