Present Value: John Hsu Wants to Start a Business in 10

question 29

Multiple Choice

Present value: John Hsu wants to start a business in 10 years. He hopes to have $100,000 at that time to invest in the business. To reach his goal, he plans to invest a certain amount today in a bank term deposit that will pay him 9.50 percent annually. How much will he have to invest today to achieve his target? (Round to the nearest dollar.)

• A) $54,233
• B) $63,837
• C) $91,324
• D) $40,351

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Definitions:

Stroop Effect

A phenomenon in cognitive psychology where there is a delay in the reaction time of a task when the color of words on a test and their meaning differ.

Ink Color

Ink color refers to the pigment or dye-based constitution that determines the visual perception of ink used in writing, printing, drawing, or any form of marking.

Cognitive Psychologist

a professional specializing in the study of mental processes such as "attention, language use, memory, perception, problem-solving, creativity, and thinking."

Thought Process

The mental operation involved in cognitive functions such as reasoning, remembering, imagining, or learning.