Salvatore Has the Opportunity to Invest in a Scheme Which

question 26

Multiple Choice

Salvatore has the opportunity to invest in a scheme which will pay $5000 at the end of each of the next 5 years. He must invest $10,000 at the start of the first year and an additional $10,000 at the end of the first year. What is the present value of this investment if the interest rate is 3%?

• A) -$3189.80
• B) -$5907.57
• C) 5907.57
• D) $3189.80

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Definitions:

Graph

A visual representation of data or functions on a two-dimensional plane, where the relationship between variables can be visually interpreted.

Function

A relationship involving various inputs and permissible outputs, with the premise that each input is connected to exactly one output.

Thermostat

A device used to maintain the temperature of a system at a desired setpoint by regulating the flow of heat energy.

Degrees Fahrenheit

A scale of temperature on which water freezes at 32° and boils at 212° under standard conditions.