Jarrod Says That the Future Value of $250 Saved for One

question 40

Multiple Choice

Jarrod says that the future value of $250 saved for one year at 6 percent interest is less than the future value of $250 saved for two years at 3 percent interest.Simon says that the present value of a $250 payment to be received in one year when the interest rate is 6 percent is less than the value of a $250 payment to be received in two years when the interest rate is 3 percent.

• A)Jarrod and Simon are both correct.
• B)Jarrod and Simon are both incorrect.
• C)Only Jarrod is correct.
• D)Only Simon is correct.

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Definitions:

Motivational Impact

The influence that certain actions or changes can have on the level of motivation within individuals or groups.

Profit-sharing

A financial incentive strategy where employees receive a share of the company's profits in addition to their regular compensation.

Net Profits

The amount of money that remains from revenues after all operating expenses, taxes, and interest have been deducted.