An Investment Will Mature in 20 Years

question 12

Multiple Choice

An investment will mature in 20 years. Its maturity value is $1,000. If the discount rate is 7%, what is the present value of the investment?

• A) $178
• B) $258
• C) $276
• D) $362

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Definitions:

Retirement Saving

Financial savings accumulated over an individual’s working life to provide income in retirement.

Balanced-Budget Policies

Financial or fiscal strategies employed by governments to ensure spending does not exceed income.

Government Debt

Government debt is the total amount of money owed by the government to creditors, often as a result of borrowing to cover budget deficits.

Social Security

A government program that provides financial assistance to people with an inadequate or no income, primarily the elderly, disabled, and families with dependent children.