You have received a settlement offer from an automobile manufacturer due to mechanicalproblems with your automobile. The manufacturer will pay you $20,000 in one lump sumfive years from now. You can earn 4% on your investments. The present value of the manufacturer’s settlement offer is closest toa. $20,000.b. $19,200.c. $24,330.d. $16,440.
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
You have received a settlement offer from an automobile manufacturer due to mechanical
problems with your automobile. The manufacturer will pay you $20,000 in one lump sum
five years from now. You can earn 4% on your investments. The present value of the manufacturer’s settlement offer is closest to
a. $20,000.
b. $19,200.
c. $24,330.
d. $16,440.
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