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# If the interest rate is zero, then $100 to be paid in 10 years has a present value that is

less than $100, more than $100, exactly $100, Indeterminate.

**Solution:**

The present value of $100 in 10 years at an interest rate of 0% is $100. It is because there is no return in the form of interest on the investment.

Present Value = Future Value/ (1+interest)^{years}

PV = 100/(1+0)^{10}

= 100/1^{10} =100

If the interest rate is other than zero then the value increases every time.

## If the interest rate is zero, then $100 to be paid in 10 years has a present value that is

less than $100, more than $100, exactly $100, Indeterminate.

**Summary:**

If the interest rate is zero, then $100 to be paid in 10 years will be $100.

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