The Present Value of an Ordinary Annuity of $350 Each

question 94

Multiple Choice

The present value of an ordinary annuity of $350 each year for five years,assuming an opportunity cost of 4 percent,is: (Round to the nearest whole dollar)

• A) $288
• B) $1,896
• C) $1,750
• D) $1,558

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Definitions:

Indifference Curve

A graph showing different combinations of goods or services that give a consumer equal satisfaction and utility.

Pizza

A savory dish of Italian origin consisting of a usually round, flattened base of leavened wheat-based dough topped with tomatoes, cheese, and often various other ingredients.

Indifference Curve

A graphical representation showing different combinations of two goods that provide the consumer with equal levels of satisfaction and utility.

Utility Maximizing

The process by which individuals allocate their resources to achieve the highest level of satisfaction possible.