Calculate the Present Value of an Asset Worth $2,000 Four

question 356

Multiple Choice

Calculate the present value of an asset worth $2,000 four years from now if the interest rate is 6 percent.

• A) $2,480
• B) $2,524.95
• C) $1,584.19
• D) $1,520

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Definitions:

Commitment Date

The date on which two parties agree upon the terms of a financial transaction or agreement, creating a commitment.

Net Method

An accounting method that records transactions and balances net of any discounts or allowances.

Spot Rates

The immediate exchange rate at which one currency can be exchanged for another currency on the foreign exchange market.

Exchange Rates

The rate at which one currency can be exchanged for another, influencing international trade and investment decisions.