Which of the Following Is the Correct Formula for Calculating

question 66

Multiple Choice

Which of the following is the correct formula for calculating the present value of an amount invested (A) at an interest rate of r, for n periods?

• A)A x (1/(1 + r)) x n
• B)A x (1/(1 + r)ⁿ)
• C)A x (1/(r x n))
• D)A x (1/(1 + n)^r

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Definitions:

Economic Profit

The financial gain obtained after subtracting both explicit and implicit costs from total revenue, reflecting the true profitability of a business.

Competitive Equilibrium

A market condition where supply meets demand, with prices stabilizing at a level where the quantity demanded equals the quantity supplied.

Monopoly

A market structure characterized by a single seller or producer supplying a unique product or service, with no close substitutes, giving them significant control over the market price.

Usury Law

Regulations governing the maximum interest rates that can be charged on loans, aimed at preventing lending practices deemed exploitative.