Asked by maddie arveseth on May 26, 2024
Verified
Which would you rather have? a)$100,8 years from now at a 2% interest or b)$100,2 years if the interest rate is 8%.
Interest Rate
The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, per period of time.
Years From Now
Projected or anticipated time in the future, often used in planning, forecasting, or speculation about future conditions or situations.
- Scrutinize available investment alternatives to elect the one with the most significant financial return.
- Apprehend the correlation between interest rates, time intervals, and the anticipated value of investments.
Verified Answer
VL
Vanessa LaheeJun 01, 2024
Final Answer :
a)$85.35 b)$85.73
The present value of b)is greater than the present value of a).
The present value of b)is greater than the present value of a).
Learning Objectives
- Scrutinize available investment alternatives to elect the one with the most significant financial return.
- Apprehend the correlation between interest rates, time intervals, and the anticipated value of investments.