The Present Value of $1,000 Received at the End of Year

question 154

Multiple Choice

The present value of $1,000 received at the end of year 1, $1,200 received at the end of year 2, and $1,300 received at the end of year 3, assuming an opportunity cost of 7 percent, is ________.

• A) $2,500
• B) $3,044
• C) $6,516
• D) $2,856

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Definitions:

Payroll Tax

Financial obligations enforced on both employers and employees, usually measured as a portion of the compensation employers provide to their personnel.

Federal Government

The national government of a federated state, which is the central authority governing over all the regions or states that comprise the nation.

Unemployment Program

A government initiative providing financial assistance and support services to eligible individuals who are temporarily out of work.

FICA-OASDI Tax

Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance tax; a payroll tax that funds Social Security and Medicare in the United States.