You Will Receive a Stream of Annual $70 Payments to Begin

question 145

Multiple Choice

You will receive a stream of annual $70 payments to begin at the end of year 0 until the final payment at the end of year 5.What amount will you have at the end of year 5 if you can invest all amounts at a 11% interest rate?

• A) $350.00
• B) $420.00
• C) $553.90
• D) $614.83

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Definitions:

Duplex Mind

A concept suggesting the mind has two different processing systems, one automatic and unconscious, and the other deliberate and conscious.

Automatic System

A cognitive system that operates quickly and without conscious effort, responsible for fast and intuitive reactions and judgements.

Conscious System

Refers to the parts of the mind that are aware of surroundings, thoughts, and feelings at any given moment.

Planning Fallacy

The tendency for plans to be overly optimistic because the planner fails to allow for unexpected problems.