An Annuity Pays $12 Per Year for 100 Years

question 48

Multiple Choice

An annuity pays $12 per year for 100 years.What is the present value (PV) of this annuity given that the discount rate is 8%?

• A)$144.62
• B)$146.63
• C)$149.93
• D)$151.45

Describe the purpose and components of a bond indenture.

Understand the advantages of financing through bonds instead of stock.

Grasp the concepts of present value and its application to bond valuation and interest calculations.

Understand the financial impact of issuing bonds at face value, at a discount, or at a premium.

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Definitions:

Sensitization

The process in which a repeated exposure to a stimulus results in an increased response to that stimulus over time.

Habituation

The process of becoming accustomed to a stimulus after repeated exposure, leading to a decrease in responsiveness.

Habituation

The act of an organism diminishing or ending its responses to a repeated stimulus through time.

Reward

A stimulus or event that follows a behavior and increases the likelihood of that behavior occurring again.