If You Want to Know the Present Value of $4000

question 10

Multiple Choice

If you want to know the present value of $4000 in two years and the annual interest rate is 5%,what formula can you use?

• A) Present value = $4000 / (0.05) × ².
• B) Present value = $4000 / (1 + 0.05)².
• C) Present value = $4000 × (1 + 0.05)².
• D) Present value = $4000 × (1 + 0.05 )/ ².

---

Definitions:

Relative Luminance

A measure of the amount of light that is emitted, reflected, transmitted, or viewed from a surface, adjusted for its perceived brightness to the human eye.

Brightness Constancy

The human visual system's ability to perceive objects as having a constant brightness even when the lighting conditions change.

Moon Illusion

An optical illusion in which the moon seems bigger when observed near the horizon compared to when viewed higher in the sky.

Retinal Disparity

The slight difference in the visual images that reach each eye, leading to depth perception.