If the Present Value of $100 Received One Year from Now

question 118

Multiple Choice

If the present value of $100 received one year from now is $80,what is the annual interest rate?

• A)8 percent
• B)10 percent
• C)20 percent
• D)25 percent
• E)50 percent

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Definitions:

Income Statement

A report detailing a corporation's earnings and expenditures throughout a particular time frame, leading to either a profit or a deficit.

Accounts Closed

The process of zeroing out balances in temporary accounts and transferring their balances to permanent accounts at the end of an accounting period.

End of Period

A point in time that marks the conclusion of a reporting period, such as a fiscal quarter or year, used for financial reporting and analysis.