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Suppose an Initial Investment of $100 Will Return $50/year for Three

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Essay

Suppose an initial investment of $100 will return $50/year for three years (assume the $50 is received each year at the end of the year).Is this a profitable investment if the discount rate is 20%?

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Definitions:

Price

is the amount of money expected, required, or given in payment for something, reflecting the value that must be exchanged to obtain a good or service.

Quantity Demanded

The cumulative quantity of a product or service that buyers are ready and capable of buying at a certain price within a given timeframe.

Surplus

The situation where the quantity of a good or service supplied exceeds the quantity demanded, often resulting in a decrease in price.

Price

The amount of money required to purchase a good or service, often determined by the interaction of supply and demand.

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