Suppose the interest rate is 5% and that you are to receive three annual payments of $10,000, with the first payment one year from now, the second payment two years from now, and the third payment three years from now. What is the present value of this stream of payments?
The present value is $27,232.48.
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Which of the following is not correct?
a. The higher average return on stocks than on bonds comes at the price of higher risk. b. Risk-averse persons will take the risks involved in holding stocks if the average return is high enough to compensate for the risk. c. Insurance markets reduce risk, but not by diversification. d. Risk can be reduced by placing a large number of small bets, rather than a small number of large bets.
The demand schedule is a description of the behavior of ________ in a market.
A. sellers B. goods or services C. buyers D. labor
If the net public debt remains unchanged during a given period, but the gross public debt increases, then which of the following statements must be correct?
A. Foreign ownership of U.S. Treasury securities must have risen during the period. B. Foreign ownership of U.S. Treasury securities must have fallen during the period. C. Government interagency borrowing must have increased during the period. D. Government interagency borrowing must have decreased during the period.
"In-kind" rather than cash transfer payments are represented by
A. public assistance payments. B. unemployment insurance benefits. C. Social Security benefits. D. food stamps.