-Morgan is considering entering into a contract to sell a building on January 1 in exchange for a note. The note pays a lump sum payment of $300,000 in ten years and ten annual payments of $2,500 beginning on the date of sale (January 1). If the annual interest rate is 10 percent, what is the total present value of the contract?
A) $159,489.92
B) $132,559.55
C) $131,023.42
D) $155,505.55

Question

-Morgan is considering entering into a contract to sell a building on January 1 in exchange for a note. The note pays a lump sum payment of $300,000 in ten years and ten annual payments of $2,500 beginning on the date of sale (January 1). If the annual interest rate is 10 percent, what is the total present value of the contract?
A) $159,489.92 
B) $132,559.55 
C) $131,023.42 
D) $155,505.55

Quizplus · Accepted Answer

11eb49ea_7407_6a4b_ae87_e38b0d04f7e6_TB5406_00

-Morgan Is Considering Entering into a Contract to Sell a Building