You Have Won a Contest and Will Receive $2,500 a Year

question 48

Multiple Choice

You have won a contest and will receive $2,500 a year in real terms for the next 3 years. Each payment will be received at the end of the period with the first payment occurring one year from today. The relevant nominal discount rate is 6.3 percent and the inflation rate is 4.5 percent. What are your winnings worth today?

• A)$7,249
• B)$7,367
• C)$7,401
• D)$7,500
• E)$7,838

---

Definitions:

Psychotropic Medication

Refers to drugs that affect a person's mental state and are used to treat psychiatric disorders.

Negative Behaviors

Actions or patterns of action that are harmful or undesirable in a social context, often leading to negative consequences.

Interrupting

The action of stopping or hindering a process or conversation by intervening or speaking over someone.

Stimulant

A compound that increases physiological or nervous system activity within the organism.