A major corporation hires high school students on a part-time basis. It offers a reward of $5,000 to any of its high school seniors who graduate college in four years

What is the present value of that reward to a student who just finished her junior year of high school, assuming a nominal rate of interest of 8%?


5000/(1.08 )5 = $3,675.15

Economics

You might also like to view...

An initial leftward shift in labor demand often creates a cascading chain of events, amplifying the impact of the initial shock. This is known as the ________ effect

A) Veblen B) multiplier C) cluster D) rebound

Economics

The largest component of M2 is

A) savings deposits. B) currency. C) money market mutual funds. D) travelers checks.

Economics

According to the negative income tax, the breakeven income level for a program whose tax credit is $3,000 and whose tax rate is 30 percent would be

A. $4,500. B. $9,000. C. $10,000. D. $6,000.

Economics

For given inputs of labor and capital, if technology is better, labor productivity will be

A. higher. B. lower. C. unchanged. D. characterized by increasing returns to scale.

Economics