What Is the Present Value of an Annual Payment of $1,500

question 124

Multiple Choice

What is the present value of an annual payment of $1,500 discounted back 15 years at an annual rate of return of 3%?

• A)$10,663.87
• B)$12,334.56
• C)$13,449.87
• D)$17,906.90

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Definitions:

Affordable Care Act

A comprehensive healthcare reform law enacted in 2010 in the United States, aimed at increasing health insurance coverage and reducing healthcare costs.

Part-Time Employees

Workers who are employed for fewer hours than the full-time standard, often receiving reduced benefits and compensation.

Implicit Marginal Tax Rate

The amount of additional (marginal) earnings that must be paid explicitly in taxes or implicitly in the form of reduced income supplements. The marginal tax rate establishes the fraction of an additional dollar earned that an individual is permitted to keep, so it is an important determinant of the incentive to work and earn.

Poverty Level

The minimum level of income deemed necessary to achieve an adequate standard of living in a given country or region.