What Is the Present Value of an Ordinary Annuity of $200

question 45

Multiple Choice

What is the present value of an ordinary annuity of $200 per month for two years,discounted at 6% per annum? (Assume monthly compounding)

• A)$4 800
• B)$5086.39
• C)$ 4 535.14
• D)$ 4 512.57

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Definitions:

Monopolistic Competitor

A firm in a market structure where many companies sell products or services that are similar but not identical, allowing for significant differentiation and competition.

Barriers to Entry

Factors that prevent or hinder potential competitors from entering a market or industry sector.

Close Substitutes

Products or services that can serve almost the same purpose or fulfill the same need, allowing consumers to switch easily between them.

Market Power

The ability of a company or entity to influence the price and control the market for its product or service.