The Present Value of $475 Received 3 Years in the Future

question 12

Multiple Choice

The present value of $475 received 3 years in the future would be calculated as which of the following when the interest rate is 6 percent?

• A) 475/(1.6)³
• B) 475/(1.06)³
• C) 475 × 1.6 × 3
• D) 3.06/475

---

Definitions:

Special Skills

Unique or highly developed abilities in a specific area, often requiring extensive training or experience, and valuable in particular occupations or tasks.

Agent

A person or entity authorized to act on behalf of another, known as the principal, in commercial transactions or negotiations.

Agency Relationships

A legally binding relationship established between two parties, where one, the agent, is authorized to act on behalf of the other, the principal, in business dealings.

Employment Law

The branch of law that deals with the rights and duties between employers and workers.