What is the present value of $150 in 3 years, if the interest rate is 2%...

Question

Question

What is the present value of $150 in 3 years, if the interest rate is 2% (assuming this is a money market interest rate)?

business economics

Answer 1

Answer #1

Present value = Future value / (1 + Interest rate)^{Number of
years}

= $150 / (1.02)³

= $150 / 1.0612

= $141.35

Answer 2

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