Asked by

Blandia Ihirwe
on Dec 02, 2024

verifed

Verified

What would you be willing to pay today to receive $5,000 at the end of each year for the next 10 years if interest is earned at a rate of 8% compounded annually?

A) $34,656
B) $36,235
C) $33,551
D) $72,433

Compounded Annually

Refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods on an annual basis.

Pay Today

An immediate payment requirement, often referring to the upfront cost or investment needed in a transaction or financial deal.

Interest Rate

The percentage of an amount of money charged by a lender to a borrower for the use of money over a period of time.

  • Gain an appreciation for the notion of present value and the way it responds to variations in interest rates and the passage of time.
verifed

Verified Answer

KW
Kamaurre WhiteDec 07, 2024
Final Answer:
Get Full Answer