The Present Value of a Payment to Be Received in the Future

question 56

Multiple Choice

The present value of a payment to be received in the future is:

• A) the maximum amount a person is willing to pay today to get that payment later.
• B) the interest rate equivalent to the foregone stream of income.
• C) equal to the borrowed principal minus the total value of interest payments.
• D) always larger than the current value of the repayment, once inflation is discounted.

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