Suppose the interest rate is 3% and that you are to receive three annual payments of $1,000, with the first payment today, the second payment one year from now, and the third payment two years from now. What is the present value of this stream of payments?
The present value is $2,913.47.
You might also like to view...
Imperfect price discrimination occurs when a monopolist:
A. price discriminates but some buyers pay less than their reservation price. B. charges all buyers exactly their reservation price. C. price discriminates but some buyers pay more than their reservation price. D. charges a single price to all buyers.
According to the classical model, more saving leads to more investment because
A) the people who save are the same people who invest. B) the interest rate adjusts to keep investment equal to saving. C) saving and investment are two sides of the same activity. D) the interest rate is set by the federal government.
The long run refers to a period of time over which:
A. the firm can change its level of output. B. only one input is fixed. C. production technology increases. D. all inputs are variable.
Data suggests that the tax cuts of the 1980s significantly decreased the supply of labor in the United States.
Answer the following statement true (T) or false (F)