If a Friend Offers to Pay You $1 Five Years

question 8

Multiple Choice

If a friend offers to pay you $1 five years from now, when the prevailing annual interest rate is 5%, what is the net present value of that $1 today?

• A)$0.95
• B)$1.05
• C)$0.78
• D)$1.50

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Definitions:

No Body

Indicates the absence of a body for a function, method, or statement block in programming, often used in abstract methods or interfaces.

Derived

Pertains to a class or object that inherits properties and behavior from a superclass through the mechanism of inheritance.

Class Reader

Refers to a class in Java that reads characters from a stream of input, serving as a basis for reading data from various sources.

Writer

An object in programming used to write data to a destination, such as a file or a stream.