Question No 22:
You borrow £3,000 and pay 10% each year interest. Ignoring capital, if you pay this interest at the end of each year, what is the present value of the interest payable at the end of the third year?
A. (3/10) x £300 x 3
B. (7/10) x £300
C. (10/11)^3 x £300
D. £3000 x (11/10)^3
Answer: C
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