What Is the Present Value of $100 to Be Deposited

question 1

Multiple Choice

What is the present value of $100 to be deposited today into an account paying 8%,compounded semiannually for 2 years?

• A) $85.48
• B) $100.00
• C) $116.00
• D) $116.99

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Definitions:

Normative Statements

Assertions about how the world ought to be, involving opinions and subjective judgements.

Rational Choice

A theory assuming individuals use logical calculations to make prudent decisions that provide them with the greatest benefit or satisfaction.

Facts

Data or information based on real occurrences or truths used for analysis, decision-making, or proving arguments.

Theories

Systematic ideas or principles formulated to explain phenomena, provide understanding, and predict future occurrences.