What is the present value of a payment of $100 one year from today if the interest rate is 5 percent?
A)$95.50
B)$95.24
C)$95.00
D)None of the above are correct to the nearest cent.

Question

Quizplus · Accepted Answer

The formula for present value is: PV = FV / (1+r)^n 
PV = 100 / (1+0.05)^1
PV = 100 / 1.05
PV = 95.24 
Therefore, the present value of a payment of $100 one year from today is $95.24.

What Is the Present Value of a Payment of $100