A Contract Requires Payments of $2,000 and $3,000, 90 Days

question 61

Multiple Choice

A contract requires payments of $2,000 and $3,000, 90 days and 120 days, respectively, from today. What is the value of the contract today if the payments are discounted to yield a rate of return of 12% simple interest?

• A) $4,824.06
• B) $4,828.66
• C) $4,831.48
• D) $4,837.87
• E) $5,177.53

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Definitions:

Durability

The ability of something to withstand wear, pressure, or damage, thus extending its useful life.

Proximity

The physical or psychological closeness between people, which can influence relationships and social interactions.

Similarity

The state of being alike or having attributes in common, often used to describe relationships or comparisons between objects, ideas, or individuals.

Physical Attractiveness

The degree to which a person's physical traits are considered aesthetically pleasing or beautiful to others.