You Have Been Offered a Project Paying $300 at the Beginning

question 100

Multiple Choice

You have been offered a project paying $300 at the beginning of each year for the next 20 years.What is the maximum amount of money you would invest in this project if you expect 9 percentrate of return to your investment?

• A) $15,347.70
• B) $ 2,738.70
• C) $ 2,985.18
• D) $ 6,000.00

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Definitions:

Income Tax Overpayment

A situation where an individual or entity has paid more income tax to the government than was actually owed.

Canada Revenue Agency

The federal agency responsible for administering tax laws and various social and economic benefit and incentive programs delivered through the tax system for the Government of Canada.

Simple Interest

A method of calculating interest where the charge is based on the original principal amount and does not compound.

Principal Amount

The original sum of money lent in a loan or invested, excluding any interest or profits.