The Future Value of a $2,000 Annuity Due Deposited at 8

question 163

Multiple Choice

The future value of a $2,000 annuity due deposited at 8 percent compounded annually for each of the next 10 years is ________.

• A)$28,973
• B)$31,291
• C)$14,494
• D)$13,420

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Definitions:

Marginal Cost

The financial increase due to the production of an extra product or service unit.

Artificially Scarce Good

A product or service whose availability is restricted through patents, copyrights, or other legal means, rather than by the limits of physical scarcity.

Pigouvian Tax

A tax imposed on activities that generate negative externalities, intended to correct an inefficient market outcome by internalizing the external costs.

Efficient Level

A point at which resources are allocated in the most effective manner, maximizing output without wasting resources.