The Present Value of £2,000 to Be Received Three Years

question 5

Multiple Choice

The present value of £2,000 to be received three years from now and earning a 12 per cent return is

• A)£1,424.
• B)£1,760.
• C)£2,440.
• D)£2,720.

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Definitions:

Percent Change

A mathematical calculation that describes the degree of change over time, expressed as a percentage.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded for a given period.

Price Ceiling

a legally established maximum price for goods or services, aimed at keeping prices from rising to high levels.

Equilibrium

A condition in markets where supply equals demand, and there is no external pressure for change.