Using Slightly Different Notation Than in the Text, We Could

question 39

Multiple Choice

Using slightly different notation than in the text, we could say that the present value (PV) of a payment n years in the future (FV) , given interest rate (r) , is given by the equation:

• A) PV = FVⁿ.
• B) PV = 1 ÷ FVⁿ.
• C) PV = FV ÷ (1 + r).
• D) PV = FV ÷ (1 + r)ⁿ.