Question

The spreadsheet (Excel) formula for calculating the present value of $100 at the end of each year for 2 years at 10 percent per year is: PV(.1,2,-100,0).

a) True
b) False

Answer 1

The correct answer is b) False. The formula PV(.1,2,-100,0) is not the correct spreadsheet formula for calculating the present value of $100 at the end of each year for 2 years at 10 percent per year.

Step-by-step explanation:

The correct answer is b) False. The formula PV(.1,2,-100,0) is not the correct spreadsheet formula for calculating the present value of $100 at the end of each year for 2 years at 10 percent per year. The correct formula to use is PV(rate, nper, pmt, fv, type), where:

1. rate is the interest rate per period,
2. nper is the number of periods,
3. pmt is the payment made each period,
4. fv is the future value,
5. and type is the number 0 or 1, indicating when the payment is made (0 for the end of the period, 1 for the beginning of the period).

To calculate the present value of $100 at the end of each year for 2 years at 10 percent per year, the correct formula would be =PV(0.1, 2, 0, -100, 0).