If the Present Value of the $1,000 to Be Received

question 6

Multiple Choice

If the present value of the $1,000 to be received in one year is $800,the interest rate is

• A)25 percent per year.
• B)8 percent per year.
• C)10 percent per year.
• D)12 percent per year.
• E)125 percent per year.

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Definitions:

Note Payable

A written promise to pay a specified amount of money, usually including interest, by a certain date.

Note Payable

A written promise to pay a specific sum of money on a certain date, or on demand, to the holder of the note, which can be short-term or long-term.