What Is the Present Value of a Payment of $250

question 139

Multiple Choice

What is the present value of a payment of $250 one year from today if the interest rate is 4 percent?

• A)$240.38
• B)$242.24
• C)$244.40
• D)None of the above are correct to the nearest cent.

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Definitions:

90-day Note

A short-term debt instrument that matures in 90 days, often used in business for financing or investment purposes.

Interest-bearing Note

A type of promissory note or loan agreement that includes an obligation to pay a fixed or variable interest rate over the term of the loan.

Journal Entry

A record in accounting that represents a transaction in the books of accounts, detailing the financial operations of a business.

Interest Expense

The cost incurred by an entity for borrowed funds, often reported on the income statement.