Using the Following Partial Table of Present Value of $1

question 90

Multiple Choice

Using the following partial table of present value of $1 at compound interest,determine the present value of $20,000 to be received four years hence with earnings at the rate of 12% a year:

• A)$13,660
• B)$15,840
• C)$12,720
• D)$10,400

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Definitions:

Relatively Inelastic

Describes a situation where the demand for a good or service only slightly changes in response to price changes.

Relatively Elastic

A description of a situation where the demand for a good or service significantly changes in response to a change in price.

Excise Tax

A tax on the sale or production for sale of specific goods within a country, typically on commodities like alcohol and tobacco.

Specific Items

Goods or commodities that are distinctly identified and provided in a market or contract.