As long as the discount rate is_______ the interest rate on a loan, the present value of the cost of an investment equals the initial cost of the investment.
A)greater than
B)less than
C)exactly double
D)equal to

Question

Quizplus · Accepted Answer

When the discount rate equals the interest rate on a loan, the present value of the cost of an investment matches the initial cost of the investment. This is because the discount rate is used to calculate the present value of future cash flows, and when it matches the interest rate, the future value of money is adjusted back to its original amount.

As Long as the Discount Rate Is_______ the Interest Rate