If Bill Wants to Receive $1,000 in One Year,$2,000 in Two

question 28

Multiple Choice

If Bill wants to receive $1,000 in one year,$2,000 in two years,and $3,000 in three years,for a discount rate of 5%,how much money does he have to save today?

• A) $5,070
• B) $5,357.95
• C) $5,894.75
• D) $6,030
• E) $6,567.45

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Definitions:

Retroactive Interference

A memory phenomenon where newly learned information interferes with the recall of previously learned information.

Cue-dependent Forgetting

A type of memory loss where the inability to recall information is due to missing cues or triggers that were present at the time the memory was encoded.

Decay

The natural process of decomposition or decline in quality, strength, or vigor over time.

Encoding Failure

A situation in which information fails to be stored into long-term memory, leading to the inability to recall it later.