PRC-2 · Chapter 2 · Question 34 of 45
In financial mathematics, 'Present Value' (PV) refers to:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The current worth of a future sum of money, given a specific rate of return.
Explanation
Present value 'discounts' future money back to today's terms because money available today is worth more than the same amount in the future (Time Value of Money).
More Coordinate System and Its Application MCQs
- Q36An annuity where the payments are made at the *beginning* of each period is called a/an:
- Q37What happens to the Present Value of a future payment as the discount rate (interest rate) increases?
- Q38How long will it take for a sum to double itself at 10% Simple Interest per annum?
- Q39The process of systematically paying off a debt (like a mortgage) with regular payments over time is called:
- Q40If you invest Rs. 1,000 at 5% interest compounded annually for 2 years, what is the Future Value (FV)?