At Which Interest Rate Is the Present Value of $79

question 79

Multiple Choice

At which interest rate is the present value of $79.50 one year from today equal to $75 today?

• A)4 percent
• B)5 percent
• C)6 percent
• D)7 percent

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Definitions:

Price of Y

The cost or value attributed to a good or service denoted by 'Y', often set by market demand and supply or by the seller.

Utility Function

A mathematical representation that ranks preferences or satisfaction levels of a consumer for different bundles of goods.

Budget Constraint

A representation of all the combinations of goods and services a consumer can afford to buy with their income.

Nuts

Hard-shelled seeds of certain plants that are generally edible and nutritious, often eaten raw, roasted, or used as ingredients in cooking.