Question

Assume that you are willing to postpone consumption of​ $1,000 today and buy a certificate of deposit​ (CD) at your local bank with the​ $1,000. Holding the CD for one year provides you with an​ 8% reward for saving or postponing consumption. This reward for postponing consumption implies that at the end of the year you will have how much more money for​ spending?

Answer 1

Answer:

the amount that should be show more money for spending is $80

Explanation:

The computation of the amount that should be show more money for spending is as follows;

= Certificate of deposit × reward for saving or postponing consumption percentage

= $1,000 × 8%

= $80

hence, the amount that should be show more money for spending is $80