What Is the Present Value (PV)of $100 000 Received Five

question 7

Multiple Choice

What is the present value (PV) of $100 000 received five years from now, assuming the interest rate is 8% per year?

• A)$68 058.32
• B)$73 502.99
• C)$82 609.42
• D)$60 000.00

---

Definitions:

Mortgagee

The lender or financial institution that provides a loan for the purpose of purchasing a property, holding a lien on the property until the mortgage is repaid.

Foreclosure

The legal process by which a lender takes control of a property, evicts the homeowner, and sells the home after the homeowner fails to make full principal and interest payments on a loan.

Fixed-Rate Mortgages

A type of mortgage in which the interest rate remains constant throughout the term of the loan.

Government Backing

Support or endorsement provided by governmental entities, often in the form of guarantees, subsidies, or policies.