At the interest rate r , the price of a depletable natural resource three years from the present (price in present = P )will be, everything else being equal, which of the following? A)3 P B)P ³ C)P (1 + r )³ D)3 P (1 + r )³

Question

Quizplus · Accepted Answer

The future price of the natural resource can be calculated using the formula P(1+r)^t, where t is the time period (in years) from the present. Here, t=3, so the formula becomes P(1+r)^3. Multiplying this with the given factors ^and, we get P(1+r)^3 * ^*. Simplifying this expression, we get option C: P(1+r)^3 * (^/).

At the Interest Rate R , the Price of a Depletable