One Way to Characterize the Difference Between Compounding and Discounting

question 17

Multiple Choice

One way to characterize the difference between compounding and discounting is to say that

• A)compounding involves the assumption that the interest rate is zero,whereas discounting does not involve that assumption.
• B)discounting involves the assumption that the interest rate is zero,whereas compounding does not involve that assumption.
• C)the process of compounding produces a future value,whereas the process of discounting produces a present value.
• D)the process of compounding produces a present value,whereas the process of discounting produces a future value.

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Definitions:

Mainframes

High-performance computers used primarily by large organizations for critical applications, bulk data processing such as census, industry and consumer statistics, enterprise resource planning, and transaction processing.

Supercomputers

Highly advanced computing systems capable of processing vast amounts of data and performing complex calculations at high speeds.

Mac Operating System

The operating system developed by Apple Inc. for its line of Macintosh computers, known for its intuitive interface and reliability.

PCs

Personal computers, which are electronic devices used by individuals for various computing tasks, including work and entertainment.