What Is the Present Value of a $750 Payment Made

question 32

Multiple Choice

What is the present value of a $750 payment made in 3 years when the discount rate is 5 percent?

• A)$646.96
• B)$647.88
• C)$712.50
• D)$868.22

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Definitions:

Student Loans

Financial loans provided to students to help cover the cost of higher education, which typically must be repaid after graduation.

Unsecured Creditors

Creditors who have no specific claim over the assets of a debtor in case of default, placing them lower in priority for repayment.

Bankrupt

A person who has made an assignment in bankruptcy or been forced into bankruptcy through a court order obtained by a creditor, and who has not been discharged from bankruptcy.

Discharged

The release or termination of an obligation, such as debt or duty, under certain conditions.