You Expect to Receive $5,000 in 25 Years

question 153

Multiple Choice

You expect to receive $5,000 in 25 years.How much is it worth today if the discount rate is 5.5%?

• A) $1,067.95
• B) $1,124.16
• C) $1,183.33
• D) $1,245.61
• E) $1,311.17

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Definitions:

Market Price

The present cost for purchasing or selling a product or service in a market setting.

Influence

Influence is the capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.

Perfectly Competitive Market

A perfectly competitive market is one in which there are many buyers and sellers, all of whom have complete market information, and where the goods being traded are identical, leading to one market price.

Incentive

A factor, monetary or otherwise, that motivates individuals or entities to act in a particular way or to pursue a certain course of action.