Using the Following Partial Table of Present Value of $1

question 49

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 three years hence,with earnings at the rate of 10% a year.

• A)$14,240
• B)$16,800
• C)$15,020
• D)$15,840

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Definitions:

Personal Costs

Expenses borne directly by an individual, including out-of-pocket payments and the opportunity costs of alternative actions.

Economic Activity

All activities related to the creation, dissemination, and use of products and services in an economy.

Scarce Resources

Resources that are limited in supply and cannot meet all the demands placed on them by humans.

Rational Decision

A rational decision is a choice made by comparing the anticipated outcomes, where the best possible result is selected based on some consistent criterion.