Present Value Given a 6 Percent Interest Rate,compute the Present

question 54

Multiple Choice

Present Value Given a 6 percent interest rate,compute the present value of deposits made in years 1,2,3,and 4 of $1,200,$1,400,$1,400,and $1,500.

• A)$4,356.52
• B)$4,741.68
• C)$5,188.68
• D)$5,506.00

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Definitions:

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets over a specific period of time.

Gross Domestic Product

The monetary value of all finished goods and services made within a country during a specific period.

Interest Rate

The percentage charged on a loan or paid on savings over a certain period of time, reflecting the cost of borrowing or the return on savings.

Investment

An asset or item acquired with the goal of generating income or appreciation in value.