A University of Iowa Basketball Standout Is Offered a Choice

question 64

Multiple Choice

A University of Iowa basketball standout is offered a choice of contracts by the New York Liberty. The first one gives her $100,000 one year from today and $100,000 two years from today. The second one gives her $132,000 one year from today and $66,000 two years from today. As her agent, you must compute the present value of each contract. Which of the following interest rates is the lowest one at which the present value of the second contract exceeds that of the first?

• A)7 percent
• B)8 percent
• C)9 percent
• D)10 percent

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Definitions:

Adaptation

The process of adjusting or changing to become suitable for a new environment or to better suit a specific situation or condition.

Assessment

The evaluation or estimation of the nature, quality, or ability of someone or something, especially in the context of health care to diagnose or determine the extent of illnesses.

Expressive Aphasia

A neurological condition characterized by difficulties in producing spoken language despite normal comprehension.

Traumatic Brain Injury

Damage to the brain caused by an external mechanical force, potentially leading to temporary or permanent impairment of cognitive, physical, and psychosocial functions.