The Present Value of $100 Paid in 5 Years Will

question 15

Multiple Choice

The present value of $100 paid in 5 years will be:

• A)less than $100 if the interest rate is positive.
• B)less than $100 if the interest rate is zero.
• C)more than $100 if the interest rate is positive.
• D)$100 if the interest rate is positive.

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Definitions:

Long-Term Gain

Profit from the sale of an asset held for more than a specific period, typically one year, qualifying for preferential tax treatment.

Parcel of Land

A specific piece of land, defined by boundaries, that can be owned or bought.

Capital Gain

The profit from the sale of assets or investments, such as stocks or real estate, which exceeds the purchase price.

Gift

A voluntary transfer of property or funds from one person to another without receiving anything in return, or at least without expecting a return equal to the value of the gift.