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

question 3

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 3.1 percent.What are your winnings worth today?

• A)$7,057
• B)$7,367
• C)$7,401
• D)$7,500
• E)$7,838

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Definitions:

Nuclear Family

A term used to describe a household consisting of a mother, father, and their biological or adopted children.

Decline of The Family

Refers to the perceived or real decrease in the traditional family structure's stability and function in society.

Divorced Parents

Individuals who have legally ended their marriage or partnership, which involves the separation of a child's guardians or primary caregivers into two distinct households.

Remarry

The act of marrying again after being divorced or widowed.