Molly Borrows Money by Promising to Make a Single Payment

question 49

Multiple Choice

Molly borrows money by promising to make a single payment of $100,000 at the end of 5 years. How much money is Molly able to borrow if the interest rate is 10%, compounded semiannually? (^{PV of $1}, ^{FV of $1}, ^{PVA of $1}, and ^{FVA of $1}) (Use appropriate factor(s) from the tables provided.)

• A) $61,390
• B) $62,090
• C) $38,550
• D) $74,850
• E) $78,350

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Definitions:

False Consensus Effect

The tendency to overestimate the extent to which others share our beliefs, attitudes, and behaviors.

Projection

a defense mechanism where individuals attribute their own unwanted thoughts, feelings, or motives to another person.

Personal Growth

The process of improving oneself through such means as enhancing personal skills, competencies, and self-awareness.

Carl Rogers

An influential American psychologist who founded client-centered therapy and emphasized the importance of a supportive therapeutic environment for psychological growth.