Question

2. If the present value of $400 paid one year from now is $320, what is the one-year interest rate? (Note: this number is
also known as the discount rate.)
*Make sure to input all percentage answers as numeric values without symbols, and use two decimal places of precision.
For example, if the answer is 6%, then enter 0.06.​

Answer 1

Answer:

0.2

Step-by-step explanation:

Present Value = $320

Before 1 One Year, Value =$400

Discount = $400-$320= $80

% Discount = (Discount/Amount Before 1 Year)*100

%D = (80/400)*100

.%D = 20% Or 0.2

Answer 2

Answer:

The rate of interest is $25$% per annum.

Step-by-step explanation:

It is given that the present value of $$400$ paid one year from now is $$320$.

We need to find the rate of interest.

It can be solved simply.

The Interest is $400-320$=$$80$

So, the gain or interest is $\frac{80}{320} *100=25$%

The rate of interest is $25$% per annum.

It can be calculated using Simple interest also.

Formula is SI $=\frac{P*R*T}{100}$

$80=\frac{320*r*1}{100}$

Solving $r=25$%

#SPJ2