Asked by
Abdullah Al Faruque
on Dec 01, 2024
Verified
Ashley, has discovered another wine, wine D.Wine drinkers are willing to pay 45 dollars to drink it right now.The amount that wine drinkers are willing to pay will rise by 15 dollars each year that the wine ages.The interest rate is 10%.How much would Ashley be willing to pay for the wine if he buys it as an investment? (Pick the closest answer.)
A) 76 dollars
B) 45 dollars
C) 150 dollars
D) 495 dollars
E) 71 dollars
Investment
The allocation of resources, usually money, into assets or projects expected to yield future returns.
Interest Rate
The cost of borrowing money, typically expressed as a percentage of the amount lent, which lenders charge borrowers or pay to savers.
Wine Drinkers
Individuals who consume wine, a beverage made by fermenting grapes or other fruits.
- Familiarize yourself with the concept of present value and how it influences investment choices.
- Assess the current monetary value of future earnings from assets like bonds and the enhancement in wine's worth.
- Acquire insight into how interest rates impact the value of investments.
Verified Answer
RT
Learning Objectives
- Familiarize yourself with the concept of present value and how it influences investment choices.
- Assess the current monetary value of future earnings from assets like bonds and the enhancement in wine's worth.
- Acquire insight into how interest rates impact the value of investments.