The Rate of Earnings Is 12% and the Cash to Be

question 164

Multiple Choice

The rate of earnings is 12% and the cash to be received in 2 years is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest: $$\begin{array} { l l l l } \text { Year } & 6 \% & 10 \% & 12 \% \\\hline 1 & 0.943 & 0.909 & 0.893 \\2 & 0.890 & 0.826 & 0.797 \\3 & 0.840 & 0.751 & 0.712 \\4 & 0.792 & 0.683 & 0.636\end{array}$$

• A) $8,930
• B) $7,120
• C) $7,970
• D) $8,260

---

Definitions:

Uncertainty Reduction Theory

A communication theory positing that individuals engage in interactions to reduce uncertainties about each other, thereby increasing predictability and understanding in social situations.

Reduce Uncertainties

Efforts or strategies aimed at minimizing unknowns or unpredictability in situations, often to improve decision-making or outcomes.

Qualities of Friendship

Characteristics or attributes that are generally perceived as conducive to forming and maintaining friendships, such as trust, loyalty, honesty, and mutual respect.

Define Friendship

The emotional and voluntary interpersonal relationship between two or more individuals, characterized by mutual affection, care, support, and the desire for each other's company.