What Is the Value in Year 15 of a $600

question 57

Multiple Choice

What is the value in year 15 of a $600 cash flow made in year 3 when the interest rates are 4 percent?

• A) $374.76
• B) $888.00
• C) $960.62
• D) $1,080.57

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Definitions:

Annual Rate

The interest rate for a period of one year, often used as a benchmark for savings or loan interest calculations.

Investment

The process of distributing funds or other resources with the goal of earning returns or profits.

Interest

The cost of borrowing money or the profit from lending money, usually expressed as a percentage rate over the period of one year.

Months

Units of time used in calendars that approximate the period required for the moon to complete its orbit around the Earth, commonly divided into 12 periods in a year.