Money Is Worth 5% Compounded Semi-Annually

question 14

Multiple Choice

Money is worth 5% compounded semi-annually. What is the value today of a contract that will bring in a payment of $86,500 in nine years?

• A) $63,276
• B) $38,090
• C) $55,461
• D) $41,962
• E) $55,759

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Definitions:

Rent Control

Government-enforced laws that limit the rent landlords can charge for apartments, aiming to keep housing affordable for renters.

Price Ceilings

A legal maximum price that can be charged for a good or service, intended to protect consumers from prices that are deemed excessively high.

Equilibrium Price

Equilibrium Price is the market price at which the quantity of goods supplied equals the quantity of goods demanded.

Shortage

A scenario in which the need for a product or service surpasses the amount available at a particular price.