If an Investment Requires Payment of $5,000 Now and Promises

question 78

Multiple Choice

If an investment requires payment of $5,000 now and promises to return a single payout of $15,000 one year from now, the net present value of the investment at an interest rate of 10% is approximately

• A)$3,636.
• B)$8,636.
• C)$10,000.
• D)$13,636.

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Definitions:

Prefrontal Cortex

The front part of the frontal lobes of the brain, involved in complex cognitive behaviors such as decision making, personality expression, and moderating social behavior.

Temporal Lobe

A region of the brain involved in processing auditory information and encoding memory.

Working Memory

A cognitive system responsible for temporarily holding information available for processing, important for reasoning and the guidance of decision-making and behavior.

Central Executive

The process that coordinates rehearsal systems and retrieves memory from and transfers information to permanent memory.