Suppose Your Uncle Offers You $100 Today or $150 in 10

question 133

Multiple Choice

Suppose your uncle offers you $100 today or $150 in 10 years.You would prefer to take the $100 today if the interest rate is

• A)3 percent.
• B)4 percent.
• C)5 percent.
• D)None of the above is correct.

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Definitions:

Compensatory Damages

Financial awards given to a plaintiff to compensate for actual losses or harm suffered.

Misrepresentation

A false statement of fact made by one party to another party, which has the effect of inducing that party into the contract.

Spring

A season of the year following winter and preceding summer, characterized by rising temperatures and the budding of plants.

Contract Rescinded

The act of legally canceling a contract, returning all parties to their positions prior to the agreement.