Eric's textbook costs $90, and he can resell it in one year's time for $45. if the annual interest rate is 10%, then the present

Question

horsena [70]

3 years ago

8

Eric's textbook costs $90, and he can resell it in one year's time for $45. if the annual interest rate is 10%, then the present

value of the textbook's resale value (to the nearest dollar) is

Business

1 answer:

Archy [21] · Answer 1 · 2022-08-08T14:31:27+03:00

<span>$41 Given a discount rate, the present value (PV) of money you expect to receive in the future (FV) at a specified interest rate (R) for a specified number of periods (N) is PV = FV/(1+R)^N So let's plug in the known values and solve. PV = 45/(1+0.10)^1 PV = 45/(1.10)^1 PV = 45/1.10 PV = 40.90909091 Rounding to the nearest dollar gives $41</span>