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17 September, 08:37

What is the present discounted value of $100 received 3 years from now? Assume the interest rate is 9% and that interest is paid once at the end of the year. A. 77 B. 89 C. $106 D. $130 E. $150

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  1. 17 September, 12:19
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    The correct answer is A.

    Explanation:

    Giving the following information:

    Principal = $100

    number of years = 3

    Interest rate = 9%

    To calculate the present value we need to use the following formula:

    Present Value = Final Value * (1+i) ^n

    PV = 100 / (1+0.09) ^3

    PV = $77.22
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