If You Want to Know the Present Value of $10,000

question 15

Multiple Choice

If you want to know the present value of $10,000 received in one year,and the interest rate is 4 percent,what formula can you use?

• A)Present value equals $10,000 times 0.04.
• B)Present value equals $10,000 divided by 1.04
• C)Present value equals 1.04 divided by $10,000.
• D)Present value equals $10,000 times 1.04.

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