How Much Would $5,000 Due in 25 Years Be Worth

question 138

Multiple Choice

How much would $5,000 due in 25 years be worth today if the discount rate were 5.5%?

• A)$1,067.95
• B)$1,124.16
• C)$1,183.33
• D)$1,245.61
• E)$1,311.17

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Definitions:

Tax Rate

The rate at which a person or company is taxed by the state.

Unrealized

Referring to profits or losses that have occurred on paper due to changes in the value of assets or investments but have not been actualized through a sale or transaction.

Intercompany Profits

Earnings generated from transactions between divisions or subsidiaries within the same corporation, which may be eliminated in consolidated financial statements.

Inventory

The items a business holds for the main purpose of resale or the raw materials used to produce goods for sale.