Suppose You Will Receive $800 in Two Years

question 184

Multiple Choice

Suppose you will receive $800 in two years.If the interest rate is 5 percent,then the present value of this future payment is

• A)$725.62.It would be higher if the interest rate were higher.
• B)$727.28.It would be higher if the interest rate were higher.
• C)$725.62.It would be lower if the interest rate were higher.
• D)$727.28.It would be lower if the interest rate were higher.

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Definitions:

Federal Level

Pertaining to the central government of a federation as opposed to state, provincial, or local levels.

Government Spending

Expenditures by the government for goods and services that government consumes for public purposes or to benefit its citizens.

Fiscal Year

A 12-month period that businesses and governments use for accounting purposes, which may or may not align with the calendar year.