Kurt won a lottery and will receive $1,000 a year for the next 50 years. The current value of these winnings is called the:
A) single amount.
B) future value.
C) present value.
D) simple amount.
E) compounded value.

Question

Quizplus · Accepted Answer

The current value of the winnings that Kurt will receive for the next 50 years is called the present value. This is because the value of the winnings in the future (future value) will be affected by inflation and the time value of money. By calculating the present value, we can determine the value of the winnings in today's dollars. Therefore, the correct answer is C) Present Value.

Kurt Won a Lottery and Will Receive $1,000 a Year