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ivann1987 [24]
2 years ago
15

Which cash flow would you rather pay, $425 today or $500 in two years if interest rates are 10 percent? Why?

Business
1 answer:
DerKrebs [107]2 years ago
7 0

Answer:

Explanation:

The main goal is to compare these two based on the same terms; present values. Find the present value of $500 today by discounting it using 10% interest rate over two years.

PV = FV/ (1+r)^n

where FV = Future value = $500

r = discount rate = 10% or 0.10 as a decimal

n = total duration of investment  = 2

PV = $500/(1+0.10)^2

PV = $500/1.21

PV = $413.22

Since you are basing the decision on what you would rather pay, you would want a lower pay amount. The $425 is already in its present value terms and it is more expensive. Therefore, you would prefer to pay $500 in two years.

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What is it called when banks record which account gives up money and which account receives money when a customer writes a check
swat32

Answer:

Check Clearing

Explanation:

The process by which bank records which account gives up money is called check clearing. Check clearing is the process by which banks record whose account gives up money and whose account receives money when a customer writes a check. A bank holding company is a company that owns multiple banks.

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<h3>What is meant by currency of a plan?</h3>

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4 0
1 year ago
If the money supply is​ $500 and nominal income is​ $3,000, the velocity of money is A. ​1/60. B. ​1/6. C. 6. D. 60.
algol [13]

Answer:

The correct option is c.6

Explanation:

For computing the velocity of money, the following formula should be used which is shown below:

The Velocity of money = Nominal income ÷ money supply

where,

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and, the money supply is $500

Now put these values to the above formula so that we can find out the answer

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= $3,000 ÷ $500

= 6

Thus, the velocity of money is 6

Hence, the correct option is c.6

5 0
3 years ago
Which of the following are the fastest growing forms of marketing?
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Answer: the answer is a

Explanation:

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Explanation:

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