What Is the Present Value of a Payment of $100

question 7

Multiple Choice

What is the present value of a payment of $100 to be made one year from today if the interest rate is 6 percent?

• A)$105.26
• B)$105.00
• C)$97.24
• D)$94.34

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Definitions:

Cash Payment

A transaction where a payment is made using physical currency or through electronic funds transfer, directly settling an obligation.

Cash Account

An account that records cash transactions, including cash received and disbursed, maintained by a company to keep track of its liquid assets.

Recorded

This term signifies the process of documenting transactions and events in the accounting records of a business.

Major Account Groups

Categories used in accounting to organize and summarize financial transactions, including assets, liabilities, equity, revenue, and expenses.