Suppose the Interest Rate Is 7 Percent

question 112

Multiple Choice

Suppose the interest rate is 7 percent.Consider four payment options:
Option A: $500 today.
Option B: $550 one year from today.
Option C: $575 two years from today.
Option D: $600 three years from today.
-Which of the payments has the lowest present value today?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Blindsight

The ability of people who are cortically blind due to lesions in their striate cortex to respond to visual stimuli that they do not consciously see.

Dissociation

A psychological process where certain thoughts, emotions, sensations, or memories are separated from the rest of the psyche.

Perception

the process of recognizing, organizing, and interpreting sensory information to represent and understand the environment around us.

Introspections

involve examining one's own thoughts, feelings, and sensations to gain insight into one's mental state.