If the Appropriate Interest Rate Is 8%,then Present Value of $500

question 62

Multiple Choice

If the appropriate interest rate is 8%,then present value of $500 paid at the beginning of each of the next 40 years is closest to:

• A) $23
• B) $5,962
• C) $6,439
• D) $20,0000

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Definitions:

Time Limit

A specified period within which an action must be taken or completed.

Price Quotation

An estimated cost given by a seller to a prospective buyer detailing the price of goods or services.

Invitation

An offer to enter or participate in an arrangement, event, or legal agreement.

Acceptance

The expression of assent to the terms of an offer in such a manner that it forms a legally binding contract.