Asked by Desiree Hunter on May 10, 2024
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If the interest rate is 5 percent, then what is the present value of $2,000 to be received in three years?
Present Value
The present value of a future amount of money or series of cash flow using a given rate of return.
Interest Rate
The fee, quantified as a percentage relative to the principal, levied by a lender on a borrower to utilize assets.
- Comprehend the fundamentals of the time value of money and utilize them to compute the present and future value of cash flows.
Verified Answer
SE
Learning Objectives
- Comprehend the fundamentals of the time value of money and utilize them to compute the present and future value of cash flows.