If the Current Rate of Interest Is 7%, Then the Future

question 44

Multiple Choice

If the current rate of interest is 7%, then the future value (FV) of an investment that pays $1200 per year and lasts 18 years is closest to ________.

• A) $24,479
• B) $40,799
• C) $48,959
• D) $57,119

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Definitions:

Break-Even Point

The low point on the firm’s average total cost curve. If the price is below this point, the firm will go out of business in the long run.

Shutdown Point

The level of operation at which a business or economic activity is no longer profitable and should cease operations for financial reasons.

MC Curve

Refers to the Marginal Cost curve, which depicts the increase in total cost that results from producing one more unit of a good.

ATC Curve

The Average Total Cost curve, a graph that represents the cost per unit of output when all costs (variable and fixed) are considered.