Suppose the Interest Rate Is 7 Percent

question 226

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:

Output

The result produced by a computer program or process, which can be displayed on a screen, stored in a file, or sent to a device.

ExampleRecursion

A method in programming where a function is used to call itself, either directly or indirectly, to address a problem by dividing it into more manageable, smaller issues.

Infinite Recursion

A condition where a function calls itself indefinitely without a breaking condition, leading to a stack overflow error.

Abnormal Termination

The unexpected interruption of a program's execution due to errors like runtime exceptions, resulting in the program ending abruptly.