Given an Annual Interest Rate of 2%, the Present Value

question 182

Multiple Choice

Given an annual interest rate of 2%, the present value of a future payment of $1,500 to be paid in one year is:

• A) $1,250.55.
• B) $1,470.59.
• C) $1,530.
• D) $1,500.

---

Definitions:

Current Liability

Obligations that a company needs to settle within one fiscal year or its current operating cycle, whichever is longer, often including accounts payable, short-term loans, and accrued expenses.

Accounts Payable

Amounts a company owes to creditors for items or services purchased on credit.

Mortgage Payable

A liability represented by a legal agreement granting a lender a lien on real estate property as security for the repayment of a loan.

Provisions

Liabilities of uncertain timing or amount, recognized on the financial statements for expected losses or expenses.