What Is the Present Value (PV) of an Investment That

question 58

Multiple Choice

What is the present value (PV) of an investment that will pay $500 in one year's time, and $500 every year after that, when the interest rate is 10%?

• A) $2500
• B) $4000
• C) $3000
• D) $5000

---

Definitions:

Net Capital Outflow

Net capital outflow refers to the difference between the domestic investment in foreign assets and the foreign investment in domestic assets over a particular period.

Foreign-Currency Exchange

The trading of one currency for another, determining how much one currency is worth in terms of the other.

Exports

Goods or services sent from one country to another for trade or sale.

Supply

The total amount of a specific good or service that is available to consumers.