Mark Invests in a 10-Year Annuity with an Initial Payment

question 21

Multiple Choice

Mark invests in a 10-year annuity with an initial payment of $20,000,that grows at 4% per year.What is the future value of this annuity,if the interest rate is 8%?

• A)$200,000
• B)$339,340.36
• C)$157,180.24
• D)$162,217.92
• E)$350,216.31

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Definitions:

Monopolist

An individual or company that possesses exclusive control over the supply or trade of a commodity or service.

Unregulated Monopolist

A monopoly that operates without government regulation, potentially leading to unfair pricing and poor service.

Market Efficiency

A condition where all available information is already reflected in asset prices, and it's impossible to achieve consistently higher returns.

Competitive Price-Taker

A market participant that accepts prevailing market prices without having the influence to alter them, typically due to the presence of numerous sellers and buyers.