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  3. Study Set
    Principles of Macroeconomics Study Set 8
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    Exam 14: The Basic Tools of Finance: Present Value Measuring the Time Value of Money
  5. Question
    Suppose the Interest Rate Is 5 Percent
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Suppose the Interest Rate Is 5 Percent

Question 3

Question 3

Multiple Choice

Suppose the interest rate is 5 percent.Which of the following payment options has the highest present value today?


A) $550 one year from today.
B) $580 two years from today.
C) $600 three years from today.
D) $615 four years from today.

Correct Answer:

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