What Is the Present Value (PV)of an Investment That Pays

question 95

Multiple Choice

What is the present value (PV) of an investment that pays $10,000 every year for four years if the interest rate is 7% APR,compounded quarterly?

• A)$33,730
• B)$33,872
• C)$38,680
• D)$40,000
• E)$30,516

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Definitions:

Taxable Income

The portion of an individual’s or corporation's income that is subject to taxes by the government.

Withholding Allowance

A claim made by an employee on a W-4 form to reduce the amount of income tax withheld from their paycheck.

Taxable Income

The portion of an individual's or corporation's income that is subject to taxation by the government, after allowances, exemptions, and deductions.

Withholding Allowance

Withholding allowance refers to an exemption that reduces how much income tax an employer deducts from an employee's paycheck.