Consider the Two Investments Shown in the Table A)-38%
B)-2

question 27

Multiple Choice

Consider the two investments shown in the table. Find the present value of each at Year 0 assuming an interest rate of 5%. What is the percentage difference in the present values (with Investment 1 as the base of the percentage) ? $$\begin{array} { | c | c | c | } \hline \text { Year } & \text { Investment \#1 } & \text { Investment \#2 } \\\hline 0 & \$ 0 & \$ 0 \\\hline 1 & \$ 100 & \$ 100 \\\hline 2 & \$ 100 & \$ 1,100 \\\hline 3 & \$ 1,100 & \$ 0 \\\hline\end{array}$$

• A)-3.8%
• B)-2.6%
• C)3.5%
• D)4.3%
• E)-4%

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