Trish Receives $450 on the First of Each Month

question 109

Multiple Choice

Trish receives $450 on the first of each month. Josh receives $450 on the last day of each month. Both Trish and Josh will receive payments for next four years. At a discount rate of 9.5 percent, what is the difference in the present value of these two sets of payments? 

• A) $141.80 
• B) $151.06 
• C) $154.30 
• D) $159.08 
• E) $162.50 

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Definitions:

Execution

The carrying out of a court order or judgment, or the process of putting a plan, order, or course of action into effect.

Pretermitted

In the law of wills, an heir born after the execution of the testator’s will.

Testator's Will

The legal document through which a person (the testator) expresses their wishes as to how their property is to be distributed after death.

Attorney-In-Fact

An agent who is given express, written authorization by his principal to do a particular act or series of acts on behalf of the principal.