Which is more valuable, receiving $775 today or receiving $885 in 2.5 years if interest rates are 7.25 percent?
A)Receiving $775 today
B)Receiving $885 in 2.5 years
C)They are worth the same amount
D)Need more information to make a determination

Question

Quizplus · Accepted Answer

The present value of $885 in 2.5 years at a 7.25% interest rate is less than $775 today, making the $775 today more valuable.

Which Is More Valuable, Receiving $775 Today or Receiving $885