If you knew that an investment was going to pay you $215,892.50 in 10 years, and you knew that the annual interest rate over that time would be 8 percent, you could calculate the present value to be:
A. $80,000.
B. $100,000.
C. $150,000.
D. $125,000.
B. $100,000.
You might also like to view...
The relationship between distance traveled in five hours and speed shown in the figure above is
A) positive. B) negative. C) inverse. D) cross-sectional. E) multilateral.
Based on the figure above, curve B is the firm's
A) marginal cost curve. B) total cost curve. C) average total cost curve. D) total variable cost curve. E) total fixed cost curve.
If the public is not sure about the central bank's motives, then
A) initial releases of data may be less accurate than later data releases. B) the predominant source of shocks to the economy must be shocks to the LM curve. C) central bankers should try to stabilize the inflation rate. D) modern macroeconomic modeling techniques will fail.
Which of the following results in the greatest present value if the interest rate is 10%?
a. A perpetuity that pays $10 per year. b. One hundred dollars tomorrow. c. A payment of $111 at the end of this year. d. One hundred dollars today.