If the Rate of Earnings Is 10% and the Cash

question 49

Multiple Choice

If the rate of earnings is 10% and the cash to be received in two years is $10,000, determine the present value amount, using the following partial table of present value of $1 at compound interest. $\begin{array}{|l|l|l|l|}\hline 12 \% & 10 \% & 6 \% & \text { Year } \\\hline 0.893 & 0.909 & 0.943 & 1 \\\hline 0.797 & 0.826 & 0.890 & 2 \\\hline 0.712 & 0.751 & 0.840 & 3 \\\hline 0.636 & 0.683 & 0.792 & 4 \\\hline\end{array}$

• A) $8,900
• B) $8,260
• C) $7,970
• D) $9,090

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Definitions:

Dim Light

A low level of illumination that makes it difficult to see, often creating an ambiance or used to signify nighttime.

Periphery

The outer limit or edge of an area or object, often referring to regions or elements not central to the main focus.

Retina

A layer at the back of the eyeball containing cells sensitive to light, essential for vision.

Optic Nerve

A crucial nerve in the eye that transmits visual information from the retina to the brain.