Liam is considering putting money in an investment plan that will pay him $52,000 in 12 years. If Liam's opportunity cost rate is 7 percent compounded annually, what is the maximum amount he should be willing to pay for the investment today? Use a financial calculator to determine the amount.
A) $23,089
B) $25,526
C) $26,888
D) $28,685
E) $30,534

Question

Quizplus · Accepted Answer

The correct answer is A because the present value of the investment is $23,089. This is the maximum amount that Liam should be willing to pay for the investment today.

Liam Is Considering Putting Money in an Investment Plan That