What Is the Present Value of a Six-Year, $5,000 Per

question 65

Multiple Choice

What is the present value of a six-year, $5,000 per year annuity at a discount rate of 10 percent?

• A)$21,776.30
• B)$3,371.91
• C)$16,760.78
• D)$18,327.82

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Definitions:

Deflation

A decrease in the general price level of goods and services in an economy over a period, often leading to increased purchasing power of the currency.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Disinflation

A reduction in the rate of inflation

Underemployed

Refers to individuals working fewer hours than they would prefer, or in positions that don't fully utilize their skills and education.