Your Grandfather Left You an Inheritance That Will Provide an Annual

question 74

Multiple Choice

Your grandfather left you an inheritance that will provide an annual income for the next 10 years.You will receive the first payment one year from now in the amount of $3,000.Every year after that,the payment amount will increase by 6 percent.What is your inheritance worth to you today if you can earn 9.5 percent on your investments?

• A)$23,774.36
• B)$28,666.67
• C)$33,121.21
• D)$35,464.12
• E)$38,908.17

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Definitions:

Efficiency Wage

A higher wage paid by employers to increase productivity by attracting better applicants, reducing turnover, and motivating employees.

Marginal Productivity

The additional output that is produced by adding one more unit of a factor of production, holding other factors constant.

Income Distribution

The way in which total income is divided among the population or different groups in an economy.

Labor Market

The supply and demand for labor, where employers seek to hire workers and workers look for employment.