What Is the Future Value of a Stream of $800

question 55

Multiple Choice

What is the future value of a stream of $800 annual payments worth to the investor at the end of 10 years if these payments are invested at an annual rate of return of 8.5%?

• A)$11,868.08
• B)$12,195.22
• C)$13,334.90
• D)$13,667.88

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Definitions:

Inflation

An overall uptick in price levels and a decline in the value of money.

Liberal Economist

An economist advocating for policies promoting free market principles, minimal government intervention, and individual liberties in economic matters.

Government Spending Cuts

Government Spending Cuts involve the reduction of public sector expenditure in an attempt to balance budgets and reduce deficits.

Multiplier

In economics, it refers to the factor by which gains in total output are greater than the change in spending that caused it.