Which of the Following Results in the Greatest Present Value

question 67

Multiple Choice

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.

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Definitions:

Endocrine System

A collection of glands that produce hormones which regulate metabolism, growth and development, tissue function, sexual function, reproduction, sleep, and mood, among other things.

Glands

Organs in the body that secrete hormones or other substances directly into the blood or onto a surface within or outside the body.

Hormones

Chemical messengers produced by the glands in the endocrine system, affecting many different processes throughout the body.

Cerebellum

A major structure of the hindbrain crucial for motor control, coordination, precision, and timing of movements.