You Have a Choice Between Receiving $500 Now and $530

question 21

Multiple Choice

You have a choice between receiving $500 now and $530 in six months' time.Current interest rates are 10% p.a.(simple interest) .As a rational investor,which option would you choose and why?

• A)$500 now,because receiving $530 in six months' time is equivalent to earning only 6% interest,whereas in the bank you can earn 10% interest.
• B)$530 in six months' time,because $500 invested for six months is only worth $525.
• C)$500 now,because it would be worth $550 in six months' time.
• D)$500 now,because you have the option to invest or consume goods.

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Definitions:

Assault and Battery

A legal concept involving the actual physical striking of another person (battery), and/or the act of threatening or attempting to cause physical harm (assault).

Intended to Hurt

Actions or words deliberately aimed to cause pain or damage to others.

Continuing Trespass

The ongoing or repeated unauthorized intrusion onto another's property, which can result in legal action.

Property Line

A defined boundary that separates one parcel of land from another, often marked by physical objects or legal documentation.