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:

Ecocentric

The opposite of anthropocentrism; the view that humans are only one part of the global ecosystem.

Climate Change

Long-term alterations in temperature, precipitation, and weather patterns, primarily attributed to human activities, especially the emission of greenhouse gases.

Ecosystem Diversity

Ecosystem diversity refers to the variety of habitats, biotic communities, and ecological processes in the biosphere, as well as the diversity within ecosystems.

Species Diversity

The variety and abundance of different species within a given ecological community or ecosystem.