What Is the Present Value (PV) of an Investment That

question 36

Multiple Choice

What is the present value (PV) of an investment that will pay $400 in one year's time, and $400every year after that, when the interest rate is 5%?

• A) $8000
• B) $2400
• C) $3600
• D) $7200

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Definitions:

Partnership Agreement

A legal document that specifies the rights, obligations, and responsibilities of each partner in a business partnership.

Initial Investment

The initial amount of money put into a project, asset, or venture to start it or acquire it.

Capital

Assets or resources that are used to generate income or invested to create financial gains.

Proportion

A comparative relationship between parts of a whole, often expressed as a ratio or fraction.