Samantha has holdings of 250 troy ounces of platinum,currently valued at $815 dollars per ounce.She estimates that the price of platinum will rise to $850 per ounce in the next year.If the interest rate is 8%,should she sell the platinum today?
A)Yes,as the difference between selling now and selling in one year is $7550 dollars today.
B)Yes,as the difference between selling now and selling in one year is $6991 dollars today.
C)Yes,as the difference between selling now and selling in one year is $5513 dollars today.
D)No,as the difference between selling now and selling in one year is -$6988 dollars today.

Question

Quizplus · Accepted Answer

The difference between selling now and selling in one year is $7550 dollars today. This is because the current value of the platinum is $250 * $815 = $203,750. If she sells the platinum in one year, she will receive $250 * $850 = $212,500. The difference between these two values is $212,500 - $203,750 = $7550.

Samantha Has Holdings of 250 Troy Ounces of Platinum,currently Valued