Suppose You Will Receive $500 at Some Point in the Future.If

question 27

Multiple Choice

Suppose you will receive $500 at some point in the future.If the annual interest rate is 7.5 percent,then the present value of the $500 is

• A)$411.26 if the $500 is to be received in 5 years and $338.95 if the $500 is to be received in 10 years.
• B)$348.28 if the $500 is to be received in 5 years and $242.60 if the $500 is to be received in 10 years.
• C)$291.11 if the $500 is to be received in 5 years and $272.89 if the $500 is to be received in 10 years.
• D)$291.11 if the $500 is to be received in 5 years and $236.49 if the $500 is to be received in 10 years.

---

Definitions:

Limited Supply

A situation where the availability of a product, resource, or commodity is not sufficient to satisfy the demand for it.

Limited Time

A situation or condition where there is a restricted duration available to complete a task or achieve an objective.

Fundamental Attribution Error

The tendency to overestimate the influence of personality and underestimate the influence of situations in judging others' behavior.

Experiment

A systematic and scientific procedure carried out to test a hypothesis by manipulating variables and observing the outcome.