If the Interest Rate is 10 Percent, then the Future Value in Two Years of $100 Today is? [Solved] (2024)

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If the Interest Rate is 10 Percent, then the Future Value in Two Years of $100 Today is? [Solved]? ›

Answer. Therefore, the future value of $100 after 2 years with a 10% interest rate is $121. So, the correct option is c. $121.

Answer: If the Interest Rate is 10 Percent, then the Future Value in Two Years of $100 Today is $120.

$121 is the future value of $100 in two years at 10%. Also, the PV in finance is what the FV will be worth given a discount rate, which carries the same meaning as interest rate except applied inversely with respect to time (backward rather than forward.

If the appropriate interest rate is 10 percent, then the present value of $100 spent or earned one year from now is $100 divided by 1.10, which is about $91. This simple example illustrates the general truth that the present value of a future amount is less than that actual future amount.

The present value states the worth of an investment today but received at a later time. The present value for $100 paid after one year will be $90.91. The present value for $100 paid after two years will be $82.64, and paid after five years will be $62.09.

Answer and Explanation:

So, a $100 at the end of each year forever is worth $1,000 in today's terms.

The correct Answer is:True

100 at the rate of 10% per annum, compounded annually for 2 years. The amount he has to pay after 2 years is Rs. 121.

Future value (FV) is $100. Number of years (n) is 10 years. Opportunity cost (r) is 9%. Hence, the present value of $100 to be received 10 years from today is $42.241.

Answer and Explanation: The calculated future value of the investment in 2 years is $121.

The $100 investment becomes $161.05 after 5 years at 10% compound interest.

How much is 10% percent interest? ›

The principal amount is Rs 10,000, the rate of interest is 10% and the number of years is six. You can calculate the simple interest as: A = 10,000 (1+0.1*6) = Rs 16,000. Interest = A – P = 16000 – 10000 = Rs 6,000.

Compound Interest Examples

Year 1: 100 dollars saved with 10% interest per year is $110 dollars.

Net Present Value (NPV)

Use an Interest Rate of 10% to work out the NPV. Money In: $570 next year: PV = $570 / (1+0.15)¹ = $570 / 1.15. PV = $495.65 (to nearest cent).

For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72 ÷ 10) = 7.2) to grow to $2. In reality, a 10% investment will take 7.3 years to double (1.10^7.3 = 2).

The calculated present value of $100 to be paid in 2 years is $82.64.

For example, for a deposit at a stated rate of 10% compounded monthly, the effective annual interest rate would be 10.47%.

Answer & Explanation

The future value of $10,000 on deposit for 2 years at 6% simple interest is $11,200.

The $100 investment becomes $161.05 after 5 years at 10% compound interest.

The more compounding periods there are, the greater the future value (FV) – all else being equal. For example, if you decided to invest $100.00 at an interest rate of 10% – assuming a compounding frequency of 1 – the investment should be worth $110 by the end of one year.