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A Payment of $10,000 Is to Be Made in the Future

question 36

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A payment of $10,000 is to be made in the future. The interest rate 3%. Is this payment worth more if it is paid in 5 years or 10 years? How much more is it worth?


Definitions:

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus following a particular behavior increases the likelihood of that behavior being repeated.

Proximate Cause

The direct or immediate cause of an event or outcome, as opposed to more distant or ultimate causes.

Innate Behavior

Behaviors that are hardwired into an organism's biology and that an organism performs correctly the first time in response to a stimulus, without prior experience or learning.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

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