Suppose the Interest Rate Is 5 Percent

question 151

Multiple Choice

Suppose the interest rate is 5 percent.Consider three payment options:
1) $500 today.
2) $520 one year from today.
3) $550 two years from today.
Which of the following is correct?

• A)1 has the lowest present value and 3 has the highest.
• B)2 has the lowest present value and 1 has the highest.
• C)3 has the lowest present value and 2 has the highest.
• D)None of the above is correct.

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Definitions:

Conflict Resolution Skills

The ability to resolve disagreements or conflicts effectively through communication, negotiation, and empathy.

Academic Excellence

Achieving a high level of performance or outstanding achievements in educational pursuits, often measured by grades, awards, or recognition from educational institutions.

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Emotions that require self-awareness and reflection, such as embarrassment, guilt, and pride.

Psychopathology

The scientific study of psychological disorders, including their symptoms, etiology (causes), and treatment.