Assume Money Can Earn 15% Compounded Semi-Annually

question 140

Multiple Choice

Assume money can earn 15% compounded semi-annually. Rank the following payments in order of the payee's first choice, second choice, and third choice, respectively: 10,000 paid today, $20,000 to be paid five years from today, or $13,500,000 to be paid fifty years from today.

• A) $10,000; $20,000; $13,500,000
• B) $10,000; $13,500,000; $20,000
• C) $13,500,000; $10,000; $20,000
• D) $13,500,000; $20,000; $10,000
• E) $20,000; $13,500,000; $10,000

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Definitions:

Great Depression

A severe worldwide economic downturn that lasted from 1929 to the late 1930s, characterized by widespread unemployment, poverty, and deflation.

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A term referring to individuals in their late childhood and adolescence up to early adulthood.

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The choice or condition of postponing marriage until a later age for various reasons, including career, education, or personal preference.

Herbert Hoover

The 31st President of the United States (1929–1933), whose presidency was marked by the onset of the Great Depression.