Which of the Following Investments Would Have the Lowest Present

question 77

Multiple Choice

Which of the following investments would have the lowest present value? Assume that the effective annual rate for all investments is the same and is greater than zero.

• A) Investment A pays $250 at the end of every year for the next 10 years (a total of 10 payments).
• B) Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments).
• C) Investment C pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments).
• D) Investment D pays $2,500 at the end of 10 years (just one payment).
• E) Investment E pays $250 at the beginning of every year for the next 10 years (a total of 10 payments).

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Definitions:

Veins

Blood vessels that carry blood toward the heart, differing from arteries which carry blood away from the heart.

Left Atrium

A chamber among the heart's four, responsible for accepting blood enriched with oxygen from the lungs and propelling it into the left ventricle.

Congestive Heart

A condition, often termed congestive heart failure, where the heart is unable to pump blood efficiently, leading to fluid buildup in various parts of the body.

Myocardial Infarction

A medical condition commonly known as a heart attack, caused by the interruption of blood flow to a part of the heart.