Suppose That You Are Considering an Investment That Will Pay

question 65

Multiple Choice

Suppose that you are considering an investment that will pay you $4000 per year for the next five years.The appropriate rate of interest is 5%.You want to know the present value of the cash flows from this investment.To solve this problem in Microsoft Excel,you would use which of the following excel formulas?

• A)=PV(.05,5,4000,0,0)
• B)=PV(.05,5,4000,0,1)
• C)=PV(5,.05,4000,0)
• D)=PV(5,5,4000,0)

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Definitions:

Need-Based

A criteria or qualification that is determined by the applicant's financial need or income level, often used for financial aid or grants.

Mortality Rate

A measure of the number of deaths in a particular population, scaled to the size of that population, per unit of time.

Social Security Retirement Benefit

A government payment program that provides financial assistance to people who are retired from work.

Monthly Benefit

A regular payment received each month, such as from a pension or Social Security, designed to cover living expenses.