You Are Considering an Investment That Is Expected to Pay

question 44

Multiple Choice

You are considering an investment that is expected to pay 5 percent in year 1, 7 percent in years 2 and 3 and 9 percent in year 4. If you invest $2,000 today, what will this investment be worth at the end of the fourth year?

• A) $2,501.42
• B) $2,693.71
• C) $2,713.04
• D) $2,620.68

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Definitions:

Four Ws

A framework often used in project planning and reporting, referring to Who, What, Where, and Why, detailing the parties involved, activities, locations, and reasons respectively.

Budget

A financial plan for a defined period, often one year.

Hierarchy of Effects

A model describing the stages a consumer passes through in the process from unawareness of a brand to purchasing it, including awareness, interest, desire, and action.

Interest Stage

A phase in the consumer decision process where individuals develop an interest in a product or service after becoming aware of it.