Answer:
there is an economic principle that states that 1 dollar today is worth more than 1 dollar in the future, since an invested dollar could earn interests and gain value.
For example, we can assume a 6% interest rate (0.5% monthly interest rate), and using the present value formula we can determine the present value of $100:
- given to us in 30 days = $100 / (1 + 0.5%)¹ = $99.50
- given to us in 150 days = $100 / (1 + 0.5%)⁵ = $97.54
- given to us in 300 days = $100 / (1 + 0.5%)¹⁰ = $95.13
In order to calculate the value of $100 given to us tomorrow, we would need to determine a daily interest rate = 6% / 360 = 0.00017
- $100 given to us tomorrow = $100 / (1 + 0.00017)¹ = $99.98
since the amount of money is not that large and the interest rate is rather low, the difference in value is not that large. But imagine if you used a 24% interest rate instead of 6% (monthly interest rate = 2%)
- $100 given to us in 30 days = $100 / (1 + 2%)¹ = $98.04
- $100 given to us in 150 days = $100 / (1 + 2%)⁵ = $90.57
- $100 given to us in 300 days = $100 / (1 + 2%)¹⁰ = $82.03
as the interest rate increases, the present value decreases.
Answer:
A and D
Reasoning:
If you look at the different values, you can see that only A and D can be correct answers.
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Subtracting 2 from each number
Answer:
5x -1
Step-by-step explanation:
(6x – 8) + (–x + 7)
Combine like terms
6x -x -8+7
5x -1
