How Much Would You Need to Invest Today as a Lump

question 9

Multiple Choice

How much would you need to invest today as a lump sum at 10.5 percent, compounded continuously, to have $200,000 in five years? 

• A) $108,206.67 
• B) $118,311.07 
• C) $124,318.08 
• D) $114,407.17 
• E) $131,008.15 

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Definitions:

Dictator Game

A behavioral economics experiment that tests how individuals behave when they hold all the power over allocating resources.

Ultimatum Game

A game in economic experiments where one player proposes a division of resources, and the other can accept or reject it.

Dictator/Proposer

In game theory, a player who has the power to propose the division of a resource or goods, often in a bargaining or allocation scenario.

Behavioral Economists

Study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical economic theory.