What Is the Present Value of $25,250,300 to Be Received

question 16

Multiple Choice

What is the present value of $25,250,300 to be received 73 years from now if the interest rate is 22.5 percent?

• A)$10,454,550.25
• B)$9.30
• C)$12,566.60
• D)$8,987,000.45
• E)$8,500,000.25

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Definitions:

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources and the optimality of trade-offs between two agents in an economy.

Pareto Efficient

A condition where resources are distributed in such a manner that improving the situation of one person necessitates the detriment of another.

Initial Endowment

Refers to the initial amount of money, assets, or resources that an individual, firm, or country possesses before entering into any trading or production activities.

Pareto Optimal

An arrangement of resource distribution that prevents the improvement of one individual's condition without adversely affecting another individual.