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Is this how present value works

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Question - The concept of present value. If you put money in the bank with an annual interest rate of 5% then, $100 invested today

5% interest rate paid by the bank

5.00 interest paid by the bank

$105 Amount of your money in the bank after 1 year.

So in the above example the present value is $100 and the future value is $105.

Is this how present value works?

Reference no: EM132933630

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