You Have Won a Lottery Prize That Promises to Pay

question 76

Multiple Choice

You have won a lottery prize that promises to pay you and your descendants $1,000 a year forever.If the lowest price you are willing to sell this perpetuity for is $20,000,then you must be assuming that the relevant interest rate is

• A) 5%
• B) 10%
• C) 15%
• D) 20%

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Definitions:

Storage Decay

The theory that memory traces weaken over time when information is not accessed or used, leading to forgetting.

Organic Chemistry

Organic Chemistry is the branch of science dealing with the structure, properties, composition, reactions, and synthesis of carbon-containing compounds.

Memory Trace

The theoretical concept referring to the physical change in the brain that represents the imprint of an experienced event or piece of information.

Motivated Forgetting

A psychological phenomenon whereby individuals unconsciously block memories of traumatic or disturbing events or information.