The Present Value of a Future Payment to Be Received

question 73

Multiple Choice

The present value of a future payment to be received in three years is $1,000.If the interest rate is 5%,what is the amount that will be paid in three years?

• A)$1,150.00
• B)$1,157.63
• C)$1,215.51
• D)$1,250.00

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Definitions:

Transitive Preferences

In decision theory, a preference system where if an individual prefers option A to B and B to C, then they also prefer A to C.

Condorcet Paradox

A situation in majority voting where collective preferences can be cyclical and inconsistent, despite the individual preferences being rational and transitive.

Preferred Spending

the allocation of financial resources towards goods, services, or investments that are most favored or prioritized by an individual or entity.

City Council

The legislative body that governs a city, town, or municipality, responsible for making and enforcing local laws and policies.