Suppose You Will Receive $500 at Some Point in the Future.If

question 27

Multiple Choice

Suppose you will receive $500 at some point in the future.If the annual interest rate is 7.5 percent,then the present value of the $500 is

• A)$411.26 if the $500 is to be received in 5 years and $338.95 if the $500 is to be received in 10 years.
• B)$348.28 if the $500 is to be received in 5 years and $242.60 if the $500 is to be received in 10 years.
• C)$291.11 if the $500 is to be received in 5 years and $272.89 if the $500 is to be received in 10 years.
• D)$291.11 if the $500 is to be received in 5 years and $236.49 if the $500 is to be received in 10 years.

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Definitions:

Typist

An individual who specializes in typing text, often using a keyboard or typewriter, to create documents, reports, or other written materials.

Wage Rate

The amount of money paid to an employee per unit of time, such as an hour or a year.

Economic Pie

A metaphorical representation of the total amount of wealth or resources available in an economy that can be divided among its participants.

Dollar Value

The worth or purchasing power of one United States dollar in terms of goods or services.