QuestionAugust 15, 2025

Finding the PV of a future sum, given a specific rate of return and a period of years, is called A) annuitizing B) compounding C) discounting D) coefficiency

Finding the PV of a future sum, given a specific rate of return and a period of years, is called A) annuitizing B) compounding C) discounting D) coefficiency
Finding the PV of a future sum, given a specific rate of return and a period of years, is called
A) annuitizing
B) compounding
C) discounting
D) coefficiency

Solution
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Answer

C) discounting Explanation 1. Identify the correct financial term The process of finding the present value (PV) of a future sum involves determining how much a future amount is worth today, given a specific rate of return and time period. This is known as **discounting**.

Explanation

1. Identify the correct financial term<br /> The process of finding the present value (PV) of a future sum involves determining how much a future amount is worth today, given a specific rate of return and time period. This is known as **discounting**.
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