If Payments of $1000 Are to Be Received Every Year

question 10

Multiple Choice

If payments of $1000 are to be received every year for 20 years and if the interest rate is positive, the present value of this stream will

• A)exceed $1000x20 ($20,000).
• B)equal $1000x20 ($20,000)
• C)be less than $1000x20 ($20,000).
• D)increase as the interest rate increases.

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