At Which Interest Rate Is the Present Value of $80

question 97

Multiple Choice

At which interest rate is the present value of $80.25 one year from today equal to $75 today?

• A)4 percent
• B)5 percent
• C)6 percent
• D)7 percent

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Definitions:

Iron Core

An iron core is a ferromagnetic material used in electrical transformers and inductors to concentrate magnetic flux and improve their efficiency.

Electro-magnet

A magnet created by an electric current passing through a coil surrounding a metal core.

Movable Part

A component within a mechanism that changes position or operates dynamically to perform a specific function.

Relay

A relay is an electromechanical switch used in electrical circuits to control a high-power or high-voltage load with a small input signal, often utilized for safety and control purposes.