Which of the following statements is correct? Select one: O a. None of the answers listed is correct. O b. £95 today is worth the same as £100 in one year's time if the interest rate is 5%. O c. If the annually compounding interest rate is 5%, then the present value of £100 in two years' time is £90.91. O d. If you pay £96 for an investment that pays £100 in one year's time when the interest rate is 5%, then your net present value is £0.76. O e. If the annually compounding interest rate is 5%, then the total present value (in Year 0) of receiving £100 at the end of Year 1 and £100 at the end of Year 2 is £185.94.
Which of the following statements is correct? Select one: O a. None of the answers listed is correct. O b. £95 today is worth the same as £100 in one year's time if the interest rate is 5%. O c. If the annually compounding interest rate is 5%, then the present value of £100 in two years' time is £90.91. O d. If you pay £96 for an investment that pays £100 in one year's time when the interest rate is 5%, then your net present value is £0.76. O e. If the annually compounding interest rate is 5%, then the total present value (in Year 0) of receiving £100 at the end of Year 1 and £100 at the end of Year 2 is £185.94.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Which of the following statements is correct?
Select one:
O a. None of the answers listed is correct.
O b. £95 today is worth the same as £100 in one year's time if the interest rate is 5%.
O C. If the annually compounding interest rate is 5%, then the present value of £100 in two years' time is £90.91.
O d.
If you pay £96 for an investment that pays £100 in one year's time when the interest rate is 5%, then your net present value is £0.76.
O e.
If the annually compounding interest rate is 5%, then the total present value (in Year 0) of receiving £100 at the end of Year 1 and £100 at the end of
Year 2 is £185.94.
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