If the Appropriate Interest Rate Is 8%,then Present Value of $500

question 40

Multiple Choice

If the appropriate interest rate is 8%,then present value of $500 paid at the end of each of the next 40 years is closest to:

• A)$23
• B)$5962
• C)$6439
• D)$20,0000

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Definitions:

Budget Line

A visual chart representing all the various combinations of two goods purchasable with a determined budget, with the prices of those goods fixed.

Price Falls

A reduction in the cost of goods or services in an market, often influenced by supply and demand dynamics.

Consumption

The usage of goods and services by households, contributing to the aggregate demand in an economy.

Determinants

Factors that can influence the outcome of a certain situation or the value of a specific variable in economics.