Brief Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN: 9781285165929
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 9, Problem 1QCMC
To determine
Calculation of present value of money.
Expert Solution & Answer
Answer to Problem 1QCMC
Option “b” is correct.
Explanation of Solution
Option (b):
Present value of money can be calculated as follows.
Thus, the option “b” is correct.
Option (a):
The present value would be less than $100 if the interest rate is positive. Thus, the option ‘a’ is incorrect.
Option (c):
The present value is greater than $100, if the interest rate is negative. Thus, the option “c” is incorrect.
Option (d):
The present value can be determined by using
Economics Concept Introduction
Concept introduction:
Present value: Thepresent value refers to the today’s value of the future amount that adjusted with the existing interest rate.
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Chapter 9 Solutions
Brief Principles of Macroeconomics (MindTap Course List)
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