The Present Value of $40,000 to Be Received in Two

question 74

Multiple Choice

The present value of $40,000 to be received in two years, at 12% compounded annually, is _____ (rounded to nearest dollar) . Use the following table, if needed.​

• A)$31,888
• B)$48,112
• C)$8,112
• D)$40,000

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Definitions:

Liens

Legal claims or holds on property as security for the payment of a debt or performance of some obligation.

Priority

The status of being more important or urgent than something else, often determining the order in which tasks or responsibilities are addressed.

Secured Transaction

Any transaction in which the payment of a debt is guaranteed, or secured, by personal property owned by the debtor or in which the debtor has a legal interest.

Collateral

Assets or property pledged as security for the repayment of a loan, subject to seizure on default.