How Much Would $5,000 Due in 25 Years Be Worth

question 132

Multiple Choice

How much would $5,000 due in 25 years be worth today if the discount rate were 5.5%?

• A) $1,101.38
• B) $1,311.17
• C) $983.38
• D) $1,232.50
• E) $1,166.94

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Definitions:

Supply Function

A mathematical relationship that describes the quantity of a good or service that producers are willing to sell at various prices.

Demand Function

A mathematical equation representing the relationship between the quantity demanded of a good and factors affecting its demand, such as price.

Inverse Demand

A representation of demand that expresses price as a function of quantity demanded, contrary to the typical demand function.

Inverse Supply

A concept in economics that describes a situation in which the supply of a good decreases as its price decreases, opposite to the normal supply behavior.