Suppose the interest rate is 7 percent.Consider four payment options:
Option A: $500 today.
Option B: $550 one year from today.
Option C: $575 two years from today.
Option D: $600 three years from today.
-Which of the payments has the highest present value today?
A)Option A
B)Option B
C)Option C
D)Option D

Question

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The Answer of Suppose the interest rate is 7 percent.Consider four payment options:
Option A: $500 today.
Option B: $550 one year from today.
Option C: $575 two years from today.
Option D: $600 three years from today.
-Which of the payments has the highest present value today?
A)Option A
B)Option B
C)Option C
D)Option D

Suppose the Interest Rate Is 7 Percent