If the Appropriate Interest Rate Is 8%,then Present Value of $500

question 40

Multiple Choice

If the appropriate interest rate is 8%,then present value of $500 paid at the end of each of the next 40 years is closest to:

• A)$23
• B)$5962
• C)$6439
• D)$20,0000

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Definitions:

Dividend

A portion of a company's earnings distributed to its shareholders, typically in the form of cash or additional shares.

Investing Community

A group of individuals and entities such as analysts, brokers, and investors interested in investment and financial markets.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an underlying asset at a specified price within a certain period.

Intrinsic Value

The actual, fundamental worth of an asset, investment, or company, based on underlying perception of its true value including all aspects of the business.