Suppose the Interest Rate Is 10 Percent

question 75

Multiple Choice

Suppose the interest rate is 10 percent.Which of the following payments has the largest present value?

• A)You receive $90.91 two years from today.
• B)You receive $82.64 one year from today.
• C)You receive $75.13 today.
• D)All of these payments have the same present value to the nearest cent.

---

Definitions:

Cramer's Rule

A mathematical theorem used to solve systems of linear equations with the same number of equations as unknowns, using determinants.

System of Linear Equations

A group of one or more linear equations that share a common set of variables.

Row-echelon Form

A form of a matrix where all nonzero rows are above any rows of all zeroes, and each leading entry of a row is to the right of the leading entry of the previous row.

Matrix

A rectangular array of numbers, symbols, or expressions, arranged in rows and columns, used in linear algebra.