If the interest rate is 10%, the present value of $100,000 to be received one year from now is$90,910. What does this mean?a) If you invest $100,000 today, a year from now that amount will have decreased to $90,910 b) If you invest $1000,000 today, a year from now that amount will have decreased to $9090c) If you invest $90,910 today, a year from now that amount will have grown to $100,000d) If you invest $90,910 today, a year from now that amount will have grown to $190,910
If the interest rate is 10%, the present value of $100,000 to be received one year from now is$90,910. What does this mean?a) If you invest $100,000 today, a year from now that amount will have decreased to $90,910 b) If you invest $1000,000 today, a year from now that amount will have decreased to $9090c) If you invest $90,910 today, a year from now that amount will have grown to $100,000d) If you invest $90,910 today, a year from now that amount will have grown to $190,910
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
If the interest rate is 10%, the
$90,910. What does this mean?
a) If you invest $100,000 today, a year from now that amount will have decreased to $90,910
b) If you invest $1000,000 today, a year from now that amount will have decreased to $9090
c) If you invest $90,910 today, a year from now that amount will have grown to $100,000
d) If you invest $90,910 today, a year from now that amount will have grown to $190,910
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