# BACHELOR OF BUSINESS ADMINISTRATION

## BUSINESS ADMINISTRATION

### FINANCIAL MANAGEMENT

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A \$100 deposit today that earns an annual interest rate of 10% is worth how much at the end of two years? Assume all interest received at the end of the first year is reinvested the second year.
 A \$121 B \$120 C \$141 D \$122
Explanation:

Detailed explanation-1: -Answer: If the Interest Rate is 10 Percent, then the Future Value in Two Years of \$100 Today is \$120.

Detailed explanation-2: -Answer and Explanation: The calculated present value of \$100 to be paid in 2 years is \$82.64.

Detailed explanation-3: -Present value is the value today of an amount of money in the future. 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.

Detailed explanation-4: -Answer and Explanation: The \$100 investment becomes \$161.05 after 5 years at 10% compound interest.

There is 1 question to complete.