The present value of $100 to be received 10 years from today, assuming an opportunity cost of 9 percent, is

Mathematics

1 answer:

Alona [7]1 year ago

7 0

An opportunity cost of 9 percent, is $42.

We have given that,

The present value of $100 is to be received 10 years from today,

assuming an opportunity cost of 9 percent,

present value =$100

N=10 years

I/y=9

<h3>What is the formula for the present value?</h3>

PV= FV/(1+r)^n

Where FV is the future value.

Use the given values in the formula we get,

Therefore the correct answer is 42.

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Step-by-step explanation:

To solve this question, we need to understand the normal probability distribution and the central limit theorem.

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Problems of normal distributions can be solved using the z-score formula.

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