Trish Receives $450 on the First of Each Month

question 43

Multiple Choice

Trish receives $450 on the first of each month.Josh receives $450 on the last day of each month.Both Trish and Josh will receive payments for next four years.At a 9.5 percent discount rate,what is the difference in the present value of these two sets of payments?

• A)$141.80
• B)$151.06
• C)$154.30
• D)$159.08
• E)$162.50

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Definitions:

Abbot Labs

A multinational healthcare company known for its wide range of medical devices, diagnostics, branded generic pharmaceuticals, and nutritional products.

Stocks

Shares of ownership in a company, representing a claim on the company's assets and earnings.

Indefinitely

An unspecified period of time without a predetermined end date.

Annual Rate

The interest rate for a whole year as opposed to a shorter period, commonly used in finance to compare the returns on investments or the cost of loans.