What Is the Present Value of the Following Payment Stream,discounted

question 3

Multiple Choice

What is the present value of the following payment stream,discounted at 8% annually: $1,000 at the end of year 1,$2,000 at the end of year 2,and $3,000 at the end of year 3?

• A) $5,022.10
• B) $5,144.03
• C) $5,423.87
• D) $5,520.00

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Definitions:

Government Involvement

Refers to the activities and interventions by the government in the market to regulate or support economic operations and social policies.

Wages

Wages refer to the fixed regular payment, typically calculated on a hourly, daily, or piecework basis, made by an employer to an employee.

Interest Rates

The percentage charged on borrowed money, influencing economic growth by affecting consumer spending and investment.

Equilibrium

A state in a market where supply equals demand, and there are no external forces prompting further change, leading to a stable price and quantity.