If the Annual Interest Rate Is 0 Percent,the Present Value

question 137

Multiple Choice

If the annual interest rate is 0 percent,the present value of receiving $210 in the next year is:

• A) $221.
• B) $200.
• C) $201.
• D) $210.

---

Definitions:

Compounded Semi-annually

Interest calculation method where interest is added to the principal twice a year.

Down Payment

An upfront payment made when purchasing an item on credit, often a significant percentage of the total purchase price.

Semi-annual Deposits

Deposits made twice a year into an investment or savings account.

Future Value

(1) A payment’s equivalent value at a subsequent date, allowing for the time value of money. (2) The total of principal plus interest due on the maturity date of a loan or investment.