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What is the present value of​ $500.00 to be paid in two years if the interest rate is 5​ percent?
a. ​$476.25
b. ​$500.00
c. ​$550.00
d. ​$453.51?

Respuesta :

carlosego
The present value by definition is:
 VP = VF / (1 + i) ^ n
 Where,
 VF = Future value
 I = interest
 n = Number of years
 Substituting the values:
 VP = (500) / (1+ (0.05)) ^ (2)
 VP = 453.51
 answer:
 the present value of $ 500.00 to be paid in two years if the interest rate is 5 percent is
 d. $ 453.51

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