Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Define the term Equivalence Calculations?
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Step 1
The equivalence calculation is the calculation which used a combination of the interest rate and the time value of the money to calculate the various sum of money at the several points of time which has the same economic value. It means the future value becomes equal to the present value of the given sum of money. Equivalence calculation doesn’t depend on how you pay.
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