What Is the Present Value of $1000 to Be Received

question 48

Multiple Choice

What is the present value of $1000 to be received ten years from today,assuming an interest rate of nine percent per annum?

• A)$402
• B)$488
• C)$470
• D)$422

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Definitions:

Market

A group of buyers and sellers of a particular good or service.

Diminishing

A principle often referring to diminishing returns, where additional inputs result in progressively smaller increases in output.

Marginal Product

The additional output resulting from the use of one more unit of a production input, holding all other inputs constant.

Production Function

An economic model that describes the relationship between the inputs a firm uses and the output it creates.