Suppose the interest rate is 8 percent.Consider three payment options.
1)$300 today.
2)$330 one year from today.
3)$360 two years from today.
Which of the following is correct?
A)1 has the highest present value and 2 has the lowest.
B)2 has the highest present value and 3 has the lowest.
C)3 has the highest present value and 1 has the lowest.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The Answer of Suppose the interest rate is 8 percent.Consider three payment options.
1)$300 today.
2)$330 one year from today.
3)$360 two years from today.
Which of the following is correct?
A)1 has the highest present value and 2 has the lowest.
B)2 has the highest present value and 3 has the lowest.
C)3 has the highest present value and 1 has the lowest.
D)None of the above is correct.

Suppose the Interest Rate Is 8 Percent