Suppose That the Interest Rate Is 7 Percent

question 196

Multiple Choice

Suppose that 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 lowest present value today?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Sex Pili

Hair-like structures on the surface of bacterial cells that are involved in the transfer of DNA during conjugation.

Chemical Signals

Molecules released by cells to communicate with each other, affecting the behavior or physiology of other cells.

Zygotes

The initial cell formed when two gamete cells (e.g., sperm and ovum) are fused, representing the earliest developmental stage of many organisms.

Plasmids

Circular DNA molecules separate from the chromosomal DNA, often found in bacteria, that can replicate independently and carry genes beneficial for survival.