(Present Value Tables Required)Your Grandfather Has Promised to Give You

question 36

Multiple Choice

(Present value tables required) Your grandfather has promised to give you $1,000 a year at the end of each of the next four years if you earn Cs or better in all of your courses each year.Using a discount rate of 6%,which of the following is correct for determining the present value of the gift?

• A)PV = $1,000 × 6% × 4
• B)PV = $1,000 × (PV factor,i = 4%,n = 6)
• C)PV = $1,000 × (Annuity PV factor,i = 6%,n = 4)
• D)PV = $1,000 × (Annuity FV factor,i = 6%,n = 4)

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Definitions:

Ounce Of Gold

A unit of measure for weighing gold, often used in financial markets and investments to set prices or determine value.

French Francs

The former currency of France before the country adopted the euro, reflecting France's national economic history.

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