A Bank Lends Some Money to a Business

question 51

Multiple Choice

A bank lends some money to a business. The business will pay the bank a single payment of $180,000 in ten years' time. How much greater is the present value (PV) of this payment if the interest rate is 9% rather than 8%?

• A) $35,892
• B) $83,374
• C) $7341
• D) $76,033

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Definitions:

Heterogeneous

A mixture composed of components that are not uniformly distributed or that have localized concentrations.

Homogeneous

Describes a mixture or material that has a uniform composition and properties throughout.

Catalysts

Substances that increase the rate of a chemical reaction without being consumed in the process.

Hydrogen Peroxide

A chemical compound with the formula H2O2, known for its strong oxidizing properties and used as a bleaching agent and disinfectant.