One way to characterize the difference between compounding and discounting is to say that
a. compounding involves the assumption that the interest rate is zero, whereas discounting does not involve that assumption.
b. discounting involves the assumption that the interest rate is zero, whereas compounding does not involve that assumption.
c. the process of compounding produces a future value, whereas the process of discounting produces a present value.
d. the process of compounding produces a present value, whereas the process of discounting produces a future value.
c
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Changes in the health of the average person are an important indicator of changes in the standard of living
Indicate whether the statement is true or false
The age-earning cycle usually begins
A) at relatively high income levels. B) at relatively low income levels. C) once a worker reaches 25 years of age. D) only when a worker is employed full time.
For direct price discrimination to work effectively
a. The low-valued customers should not be able to engage in arbitrage b. You need to charge the same price to the different groups c. Both groups should have the same elasticity of demand d. None of the above