Max Says That the Present Value of $500 to Be

question 269

Multiple Choice

Max says that the present value of $500 to be received one year from today if the interest rate is 8 percent is more than the present value of $500 to be received two years from today if the interest rate is 4 percent.Mitch says that $500 saved for two years at an interest rate of 3 percent has a larger future value than $500 saved for one years at an interest rate of 6 percent.

• A) Both Max and Mitch are correct.
• B) Only Max is correct.
• C) Only Mitch is correct.
• D) Neither Max nor Mitch is correct.

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Definitions:

Bladder

A hollow muscular organ in the lower abdomen that stores urine from the kidneys before it is excreted through the urethra.

Graft

A constructed part.

Fistula

An abnormal connection between two body parts, such as organs or vessels, that normally do not connect.

Synthetic Material

Man-made materials created through chemical processes, often used for their durability and high performance.