Luis Is Going to Receive $20,000 Six Years from Now

question 25

Multiple Choice

Luis is going to receive $20,000 six years from now.Soo Lee is going to receive $20,000 nine years from now.Which one of the following statements is correct if both Luis and Soo Lee apply a 7 percent discount rate to these amounts?

• A)The present values of Luis and Soo Lee's monies are equal.
• B)In future dollars, Soo Lee's money is worth more than Luis' money.
• C)In today's dollars, Luis' money is worth more than Soo Lee's.
• D)Twenty years from now, the value of Luis' money will be equal to the value of Soo Lee's money.
• E)Soo Lee's money is worth more than Luis' money given the 7 percent discount rate.

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