What Is the Value Today of $3,600 Received at the End

question 65

Multiple Choice

What is the value today of $3,600 received at the end of each year for eight years if the first payment is paid at the end of Year 4 and the discount rate is 12 percent?

• A)$11,694.21
• B)$12,484.57
• C)$12,729.12
• D)$15,089.23
• E)$14,429.52

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Definitions:

Not Excludable

A characteristic of a good or service that does not allow producers to prevent its use by non-paying consumers, often leading to market failure.

Free Riders

Individuals who benefit from resources, goods, or services without paying for them, often leading to under-provision or depletion of those resources.

Club Goods

Items that are non-rivalrous but excludable, meaning that one person's use does not reduce availability to others but access can be restricted, typically through a membership fee.

Private Goods

Private goods are products that are excludable and rival in consumption, meaning their use is limited to paying customers and one person's consumption prevents another's.