The Interest Rate Is 10% and Is Expected to Stay

question 27

Multiple Choice

The interest rate is 10% and is expected to stay constant at that level forever.The present discounted value of $50,000 a year forever starting today is

• A)$500,000.
• B)$550,000.
• C)$ infinity.
• D)$1 million.
• E)$45,454.45.

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Definitions:

Federal Judges

Officials who serve in a federal court system, appointed to their positions to interpret and apply federal laws and the United States Constitution.

Extensive Compliance Programs

Comprehensive sets of policies and procedures designed to ensure an organization meets legal and regulatory requirements.

Plates Move

The theory of plate tectonics describes the large-scale movement of the Earth's lithosphere divided into several plates that float on the semi-fluid asthenosphere beneath.

Relative

Pertaining to or determined by its position or status in relation to other things; not absolute.