Given an interest rate of 5%, which has a higher present value: A payment of $80 at the present time, or $100 in 2 years?
A) The present amount ($80 now) has a higher present value because of a positive time preference.
B) The future amount ($100 in 2 years ) has a higher present value, give an interest rate of 5%.
C) The present amount ($80 now) has a higher present value, given an interest rate of 5 %.
D) The present amount ($80 now) has a higher compounded value.
Correct Answer:
Verified
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