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:

Equilibrium Price

The price at which the quantity of a product offered is equal to the quantity of the product in demand, leading to a stable market condition.

Deductible

In insurance, it is the amount paid out of pocket by the policyholder before an insurance provider will pay any expenses.

Health Care Demanded

Refers to the quantity of health care services that individuals are willing and able to purchase at a given price.

Managed-Care Organizations

Health insurance companies that provide medical care directly to the insured individuals through specific networks of doctors, hospitals, and other healthcare providers.