Of the Following Interest Rates,which Is the Highest One at Which

question 61

Multiple Choice

Of the following interest rates,which is the highest one at which the present value of $200 ten years from today is greater than $150?

• A)2 percent
• B)4 percent
• C)6 percent
• D)8 percent

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Definitions:

Cash Received

The total amount of cash received by a company during a specific period of time, from various sources.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, often used in investment and financial decision-making.

Compound Interest

Interest accumulation on a loan or deposit which is based on the principal amount as well as on all previously gathered interest from past periods.

Annuity

An investment vehicle designed to provide a consistent payment flow to a person, often employed to secure a steady income for individuals in retirement.