If the Interest Rate Is 6 Percent, to Get Back

question 145

Multiple Choice

If the interest rate is 6 percent, to get back $300 in two years you would need to deposit ________ today.

• A) $267.00.
• B) $275.22.
• C) $283.02.
• D) $291.26.

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Definitions:

Market Value

The prevailing market price for acquiring or disposing of an asset or service.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which may not reflect the market value.

Net Loss

The amount by which total expenses exceed total revenues for a business, indicating a negative financial performance for a specific period.

Common Stock

A type of equity security that represents ownership in a corporation, granting holders voting rights and a share in the company’s profits through dividends.