The present value of $200 due in 2 years at a discount rate of 7.5%.

Solutions

Expert Solution

Present Value of future value of money is calculated as follows:

Present Value	=	Future Value	*	Discount factor
	=	$200.00	*	0.865332612
	=	$173.07

Working:

Discount factor	=	(1+i)^-n		Where,
	=	(1+0.075)^-2		i	=	0.0750
	=	0.865332612		n	=	2

Alternatively,

Present Value		=-PV(rate,nper,pmt,fv)		Where,
		= $173.07		rate	=	0.0750
				nper	=	2
				pmt	=	0
				fv	=	$200.00

jeff jeffy answered 2 years ago

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