Given an 8% Interest Rate, Compute the Present Value of Payments

question 80

Multiple Choice

Given an 8% interest rate, compute the present value of payments made in years 1, 2, 3 and 4 of $900, $800, $700, and $600.

• A) $2,409.33
• B) $2,515.90
• C) $2,591.72
• D) $2,611.38

---

Definitions:

Net Profit

The actual profit after working expenses not included in the calculation of gross profit have been paid.

Exercise Price

The price at which the holder of an options contract can buy (call option) or sell (put option) the underlying asset.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.

Call Premium

The additional amount above the bond's face value that the issuer must pay to redeem it before maturity.