1. A consumer, who is initially a lender, remains alender even after a decline in interest rates. Is thisconsumer better off or worse off after the changein interest rates? If the consumer becomes aborrower after the change is he better off or worseoff?2. What is the present value of $100 one year fromnow if the interest rate is 10%? What is the presentvalue if the interest rate is 5%?

Explanation are as follows for 1 st one . Note:- as per the guidelines we can we can provide the…

Answered: 1. A consumer, who is initially a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. A consumer, who is initially a lender, remains a lender even after a decline in interest rates. Is this consumer better off or worse off after the change in interest rates? If the consumer becomes a borrower after the change is he better off or worse off?