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19.07.2022 - 23:19

If the interest rate is 5 percent, what is the present value of $200 received at the end of five years?

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If the interest rate is 5 percent, what is the present value of $200 received at the end of five years?

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Vida April 10, 2023 в 18:10

The present value of $200 received at the end of five years at an interest rate of 5% can be calculated using the formula for present value: PV = FV / (1 + r)^n. Where PV is the present value, FV is the future value, r is the annual interest rate, and n is the number of years. Plugging in the given values, we get: PV = $200 / (1 + 0.05)^5 = $155.98 (rounded to the nearest cent). This means that if you had $155.98 today and invested it at an annual interest rate of 5%, you would have $200 at the end of five years. Conversely, if you were given $200 at the end of five years and wanted to know how much its worth today, you would need to discount it back to the present value, which is $155.98.

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