What Is the Present Value of $100 Paid to You

question 29

Multiple Choice

What is the present value of $100 paid to you a year from now if the rate of interest is 5%?

• A) $95.24
• B) $95.00
• C) $5.25
• D) $105.50

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Definitions:

Back-arc Rifting

A geological process occurring behind a volcanic arc, involving the stretching and cracking of the Earth's crust, leading to the formation of a new ocean basin.

Island Arcs

Curved chains of volcanic islands that are usually situated along the edge of a tectonic plate, created by the subduction of an oceanic plate beneath another plate.

Island Arcs

Curved chains of volcanic islands that form along the boundaries of Earth's tectonic plates, generally over a subducting plate.

Mid-ocean Ridge

An underwater mountain range, formed by plate tectonics, that encircles the globe and is the site of new oceanic crust formation.