Given an Annual Interest Rate of 2%,the Present Value of a Future

question 267

Multiple Choice

Given an annual interest rate of 2%,the present value of a future payment of $1 500 to be paid in 1 year is:

• A) $1 250.55.
• B) $1 470.59.
• C) $1 530.
• D) $1 500.

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Definitions:

Credited

Recorded or acknowledged as having received something, often used in financial contexts to indicate an addition to certain accounts.

Selling Price

The price at which a product or service is sold to customers.

Retained Earnings

The portion of a company's profits that is not distributed as dividends to shareholders but is instead reinvested in the business or kept as a reserve.

Cash Available

The amount of cash that a company or an individual has on hand or can easily access.