Question 21 Not yet answered Marked out of 0

Finance Aug 05, 2020

Question 21 Not yet answered Marked out of 0.50 Not flaggedFlag question Question text If the interest rate is greater than 0 percent then a dollar today is worth Select one:

a. more than a dollar tomorrow

b. there is not sufficient information to tell

c. the same as a dollar tomorrow

d. less than a dollar tomorrow

Expert Solution

A dollar today is not as same as dollar tomorrow since there exists a Time value of money.

On account of time value of money, dollar today is worth more than dollar tomorrow because of inflation.

So If the interest rate is more than 0% then the dollar today is more tha dollar tomorrow.

Answer is Option a)

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