If you knew that an investment was going to pay you $1,188,757 in 20 years, and you knew that the annual interest rate over that time would be 2 percent, you could calculate the present value to be:
A. $800,000.
B. $1,500,000.
C. $905,000.
D. $1,000,000.
Answer: A
You might also like to view...
A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.
If the market price of grills increases from $310 to $350, given the scenario described: A. total consumer surplus would fall by $120. B. total consumer surplus would fall by $90. C. Collin and Butch would experience a decrease in consumer surplus, but Abe's consumer surplus would rise. D. Collin would experience a decrease in consumer surplus, but Abe and Butch would experience a rise in consumer surplus.
A decrease in the price of a currency in terms of another under a flexible exchange rate regime is called:
a. capital flight. b. depreciation. c. revaluation. d. devaluation. e. currency adjustment.
At higher interest rates, people will hold more money.
a. true b. false
Which of the following is likely to shift the current demand curve for a normal good to the right?
a. a decrease in the good's price if the good is a normal good b. an increase in the price of a complementary good c. an expectation of a shortage in the future d. a decrease in income if the good is a normal good e. an expectation of a surplus in the future