Suppose analysts agree that the losses resulting from climate change will reach x dollars 100 years from now. Use the concept of present value to explain why estimates of what needs to be spent today to combat those losses may vary widely. Would you expect the variation to narrow or get wider if the relevant losses were 200, rather than 100, years into the future? Complete the following using a principle amount = $100. Instructions: Enter your responses rounded to two decimal places. 20 yrs Discount rate/ years 2% 5% 50 yrs the higher rate O the lower rate 100 yrs Is there greater volatility with a lower discount rate or higher discount rate?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Suppose analysts agree that the losses resulting from climate change will reach x dollars 100 years from now. Use the concept of
present value to explain why estimates of what needs to be spent today to combat those losses may vary widely. Would you expect
the variation to narrow or get wider if the relevant losses were 200, rather than 100, years into the future?
Complete the following using a principle amount = $100.
Instructions: Enter your responses rounded to two decimal places.
Discount rate / years
2%
5%
20 yrs
O the higher rate
O the lower rate
50 yrs
100 yrs
Is there greater volatility with a lower discount rate or higher discount rate?
Transcribed Image Text:Suppose analysts agree that the losses resulting from climate change will reach x dollars 100 years from now. Use the concept of present value to explain why estimates of what needs to be spent today to combat those losses may vary widely. Would you expect the variation to narrow or get wider if the relevant losses were 200, rather than 100, years into the future? Complete the following using a principle amount = $100. Instructions: Enter your responses rounded to two decimal places. Discount rate / years 2% 5% 20 yrs O the higher rate O the lower rate 50 yrs 100 yrs Is there greater volatility with a lower discount rate or higher discount rate?
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