You've been promised a payment of $400 in the future

Answer

d .

Explanation

Computation of Present Value using PV Function in Excel:

=-pv(rate,nper,pmt,fv)

a) Here,

PV = Present Value = ?

Rate = 6%

Nper = 3 years 

PMT = 0

FV = $400

Substituting the values in formula:

=-pv(6%,3,0,400)

PV or Present Value = $335.85

b) Here,

PV = Present Value = ?

Rate = 5%

Nper = 3 years 

PMT = 0

FV = $400

Substituting the values in formula:

=-pv(5%,3,0,400)

PV or Present Value = $345.54

c) Here,

PV = Present Value = ?

Rate = 6%

Nper = 2 years 

PMT = 0

FV = $400

Substituting the values in formula:

=-pv(6%,2,0,400)

PV or Present Value = $356

d) Here,

PV = Present Value = ?

Rate = 5%

Nper = 2 years 

PMT = 0

FV = $400

Substituting the values in formula:

=-pv(5%,3,0,400)

PV or Present Value = $362.81

So, the correct option is D "You wait 2 years and the interest rate is 5%".