What Is the Present Value (PV)of $280 000 Received 25

question 50

Multiple Choice

What is the present value (PV) of $280 000 received 25 years from now, assuming the interest rate is 4% per year?

• A)$138 422.76
• B)$140 000.00
• C)$176 452.99
• D)$105 032.70

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Definitions:

Expected Price

The anticipated cost at which a commodity, asset, or service is thought to be bought or sold in the future.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize the impact of any single asset's performance on overall portfolio returns.

Market Risk

The risk of losses in investments due to factors that affect the overall performance of the financial markets.

Rates of Return

The net gain or loss of an investment over a specified time period, expressed as a percentage of the investment’s initial cost.