With a Nominal Interest Rate of 5%,the Present Discounted Value

question 11

Multiple Choice

With a nominal interest rate of 5%,the present discounted value of $100 to be received in two year is

• A)$90.00.
• B)$90.70.
• C)$95.23.
• D)$110.00.

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Definitions:

Paying

The act of disbursing or settling a financial obligation.

Term Deposit

A type of bank deposit that is held at a financial institution for a fixed term or period of time, often yielding higher interest rates.

Matures

Refers to the final payment date of a financial instrument at which point the principal (and all remaining interest) is due to be paid.

Days

A unit of time measurement that typically represents a 24-hour period.