What Is the Present Value of $100 Promised One Year

question 47

Multiple Choice

What is the present value of $100 promised one year from now at 10% annual interest?

• A) $89.50
• B) $90.00
• C) $90.91
• D) $91.25

---

Definitions:

Taxation

The process whereby authorities impose financial charges on citizens or corporations to fund government spending and public expenditures.

Progressive

In the context of tax policy, a tax system where the tax rate increases as the taxable amount increases, leading to a more significant tax burden on higher-income individuals.

Federal Government

A system of government where power is divided between a central national government and various regional governments.

Taxes Collected

The total amount of money received by a government from individuals, corporations, and other entities as compulsory charges imposed on income, property, sales, etc., for public financing.