You Receive $500 Today Which You Plan to Save for Two

question 193

Multiple Choice

You receive $500 today which you plan to save for two years.Also,in two years you will be given another $500.If the interest rate is 5 percent,what is the present value of the payment of $500 today and the $500 in two years?

• A)$500(1.05)² + $500/(1.05)²
• B)$500(1.05)² + $500
• C)$500 + $500/(1.05)²
• D)$500 + $500

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