If the Current Rate of Interest Is 8%,then the Future

question 63

Multiple Choice

If the current rate of interest is 8%,then the future value 20 years from now of an investment that pays $1000 per year and lasts 20 years is closest to:

• A)$45,762.
• B)$36,725.
• C)$9818.
• D)$93,219.

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Definitions:

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, even though it was not predictable.

Hindsight Bias

The inclination to see events that have already occurred as being more predictable than they were before they took place.

Interference

A cognitive process where previously learned information hinders the ability to learn new information or the retrieval of information due to the non-helpful interaction between different pieces of information.

Proactive Interference

The phenomenon where older memories interfere with the recall of newer memories, often causing confusion or mix-ups.