Find the Present Value of $100 to Be Received at the End

question 250

Multiple Choice

Find the present value of $100 to be received at the end of two years if the discount rate is 12% compounded monthly.

• A)$66.50
• B)$78.76
• C)$68.80
• D)$91.80
• E)$79.75

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Definitions:

Current Interest Rates

The interest rate present at the moment in the financial market, affecting loans and savings.

Market Price

represents the current price at which an asset or service can be bought or sold in a marketplace.

Bond's Yield

The annual return on a bond investment, calculated by dividing the annual interest payments by the bond's current market price.

Market Interest Rates

The prevailing rate at which borrowers and lenders agree to conduct transactions in the financial markets.