What is the present value of a payment of $200 to be made one year from today if the interest rate is 10 percent?
A) $180
A) $220
B) $181.82
D) $222.22

Name: What is the present value of a payment of $200 to be made one year from today if the interest rate is 10 percent? A) $180 A) $220 B) $181.82 D) $222.22
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Question

Quizplus · Accepted Answer

Using the present value formula, we get:
PV = FV / (1 + r)^n
PV = 200 / (1 + 0.1)^1
PV = 200 / 1.1
PV = $181.82 (rounded to the nearest cent)

What Is the Present Value of a Payment of $200