If the Present Value of an Ordinary, 8-Year Annuity Is

question 139

Multiple Choice

If the present value of an ordinary, 8-year annuity is $12,500 and interest rates are 9.1 percent, what is the present value of the same annuity due?

• A) $13,637.50
• B) $13,941.90
• C) $14,114.80
• D) $14,211.90

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Definitions:

Ethical implications

The moral consequences or considerations arising from actions, decisions, or policies in personal, professional, or organizational contexts.

Decision entrapment

A situation where individuals continue to invest in a decision despite new evidence suggesting it may have been the wrong choice.

Satisficing

A decision-making strategy that involves selecting an acceptable or adequate solution, rather than the optimal one.

Escalating commitment

The phenomenon where people increase their investment or continue a course of action even if it's not leading to the desired outcome, often to justify prior investments.