The Present Value of a Promise to Pay $100 One

question 74

True/False

The present value of a promise to pay $100 one year from now is approximately $90.91 if the interest rate is 10 percent.

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Definitions:

Linear Equations

Equations of the first degree, meaning they involve only first-degree variables and constants, typically having a straight line as their graph.

Method Of Elimination

A technique used in solving systems of equations where one variable is eliminated by adding or subtracting the equations in order to solve for the other variable.

Fractions

A way of representing parts of a whole or a division of quantities.

Linear Equations

Equations that graph as straight lines and can be written in the form Ax + By = C, where A, B, and C are constants.