The Formula to Calculate the Present Value of a Future

question 52

Multiple Choice

The formula to calculate the present value of a future payment of $X received t years from now when the annual percentage interest rate is i is

• A)PV = $X/(1 + i).
• B)PV = $X/(1 + i)t.
• C)PV = $X(1 + i).
• D)PV = $X/i.
• E)PV = $X(1 + i)t.

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