Present Value: Tommie Harris Is Considering an Investment That Pays

question 31

Multiple Choice

Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must he invest today such that he will have $25,000 in seven years? (Round to the nearest dollar.)

• A) $23,474
• B) $38,850
• C) $17,133
• D) $16,088

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Definitions:

Equity

The concept of fairness or justice in the way people are treated within various contexts, or in finance, the ownership interest in a company as represented by stocks or shares.

Effort

The amount of physical or mental energy expended towards achieving a goal or task.

Skill-Based Pay

A compensation system that rewards employees for the skills and knowledge they acquire and are able to apply in their jobs, rather than for their job title or position alone.

Blue-Collar Workers

Blue-collar workers are individuals engaged in manual labor or skilled trades, often involving physical work in industries such as manufacturing, construction, and maintenance.