What Is the Present Value of an Investment That Pays

question 19

Multiple Choice

What is the present value of an investment that pays $400 at the end of three years and $700 at the end of 10 years if the discount rate is 5%?

• A) $1,100.00
• B) $675.30
• C) $775.40
• D) $424.60

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Definitions:

Fixture

An item of property that is attached to a structure or land in such a way that removing it would damage the property or deplete its value.

Evict Tenants

The legal process through which a landlord may remove a tenant from rental property, typically due to failure to abide by the rental agreement.

Lease Agreement

A contract specifying the terms under which one party agrees to rent property owned by another party.

Rent Control

Government-imposed limits on the amount of rent a landlord can charge for residential housing, aimed at making housing more affordable for tenants.