Answer:
$85,734
Step-by-step explanation:
We have been given that Karel sells goods to customers in exchange for a $100,000 non-interest-bearing note due in 2 years. The interest rate on this type of loan is 8%. We are asked to find the present value of the note.
, where,
PV = Present Value,
FV = Future Value,
r = Interest rate in decimal form,
n = Time
Let us convert given interest rate into decimal form as:
Therefore, the present value of the note is $85,734.