Which,if Any,of the Present Values Below Are Correctly Computed

question 155

Multiple Choice

Which,if any,of the present values below are correctly computed?

• A)A payment of $1,000 to be received one year from today,with a 8 percent interest rate,has a present value of $945.45.
• B)A payment of $1,000 to be received one year from today,with a 9 percent interest rate,has a present value of $911.11.
• C)A payment of $1,000 to be received one year from today,with a 10 percent interest rate,has a present value of $905.06.
• D)None of the above are correct to the nearest cent.

---

Definitions:

Market

A physical or virtual space where buyers and sellers interact to exchange goods, services, or information.

Highest Willingness to Pay

The maximum amount an individual is prepared to spend to obtain a good, service, or outcome, reflecting the perceived value.

Consumer

A person or collective that buys products or services for their own consumption.

Surplus Greater

A scenario where the quantity of goods produced or available exceeds the quantity demanded, often leading to lower prices or waste.