What Is the Present Value, When Interest Rates Are 10

question 118

Multiple Choice

What is the present value, when interest rates are 10 percent, of a $75 payment made every year forever?

• A) $6.75
• B) $675.00
• C) $750.00
• D) $1,000.00

---

Definitions:

Intellectual Abilities

The capacity to think logically, reason abstractly, understand complex ideas, and solve problems.

Sensory Sensitivity

An increased or heightened response to sensory stimuli, such as sounds, lights, or textures, which can be overwhelming or uncomfortable.

Theory Of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others and to understand that others have beliefs, desires, and intentions that are different from one's own.

Cognitive Flexibility

The mental ability to switch between thinking about two different concepts, and to think about multiple concepts simultaneously.