An Investment Pays $100 at the End of Each of the Three

question 313

Multiple Choice

An investment pays $100 at the end of each of the three next years. No additional payments will ever be made. If the annual interest rate is 5 percent, the present value of the investment is approximately

• A) $250.
• B) $272.
• C) $288.
• D) $300.

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Definitions:

State Regulations

Laws and rules implemented by a governmental authority to control or govern conduct within its territory.

Third-Party Payments

Transactions where a third party pays for the goods or services being offered to a consumer, common in insurance and healthcare sectors.

Subsidies

Financial support extended by the government to an economic sector (or market) aiming to promote an economic and social policy.

Economic Theory

A set of principles and frameworks for understanding how economies function, including the production, distribution, and consumption of goods and services.