Question

The current interest rate is 25%. At the end of one year, the present value of $2,000 would be what?

Answer 1

`$2500`

Explanation:

The interest rate is `25%`, so after one year, there will be a total of `100%+25%=125%` of the original amount.

For `$2000`, after one year, there will be

`$2000*125%=$2500`