Jeff Has the Opportunity to Receive Lump-Sum Payments Either Now

question 79

Multiple Choice

Jeff has the opportunity to receive lump-sum payments either now or in the future.Which of the following opportunities is the best,given that the interest rate is 7% per year?

• A)one that pays $1,000 now
• B)one that pays $1,200 in two years
• C)one that pays $1,500 in five years
• D)one that pays $1,800 in ten years
• E)one that pays $5,000 in 25 years

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Definitions:

Balanced Coin

A coin that has equal probabilities of landing on heads or tails when flipped.

Financial Consultants

Professionals who offer expert advice on money management, investments, and financial planning.

Conditional Probability

Conditional probability is the probability of an event occurring given that another event has already occurred.

Independent Events

Two events are considered independent if the occurrence of one does not affect the probability of occurrence of the other.