You Are to Receive $12,000 at the End of Five

question 73

Multiple Choice

You are to receive $12,000 at the end of five years. The available yield on investments is 6%. Which table would you use to determine the value of that sum today?

• A) Present value of an annuity of $1
• B) Future value of an annuity of $1
• C) Present value of $1
• D) Future value of $1

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Definitions:

Consumer Surplus

The difference between what consumers are inclined and financially ready to invest in a good or service, and what they actually invest.

Saints Logo Hats

Caps that feature the logo or symbols associated with the New Orleans Saints football team.

Monopoly

Monopoly refers to a market structure where a single company or entity exclusively supplies a particular product or service, inhibiting competition.

Perfect Price Discrimination

A pricing strategy where a seller charges the maximum price that each consumer is willing to pay, thus capturing the entire consumer surplus.