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Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985

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BuyFindarrow_forward

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
ISBN: 9781337091985
Textbook Problem

The interest rate is 7 percent. Use the concept of present value to compare $200 to be received in 10 years and $300 to be received in 20 years.

To determine

Calculation of present value of money.

Explanation

The present value of $200 can be calculated as follows:

Present value=Future value(1+Interest)2=200(1+0.07)10=2001.9672=101.67

The present value is $101.67

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