If the Annual Interest Rate Is 7%,the Present Value of $100

question 57

Multiple Choice

If the annual interest rate is 7%,the present value of $100 to be received at the end of two years is

• A)$87.34.
• B)$90.70.
• C)$93.46.
• D)$97.00.
• E)$107.00.

---

Definitions:

Quoted Price

The existing rate at which an asset or service can be sold or purchased.

Selling Price

The amount of money for which a product or service is sold to customers.

Face Value

The original cost of a bond or the principal balance to be paid back at maturity, excluding interest.

Market Interest Rate

The prevailing rate at which interest is charged on loans and bonds in the broader financial market.