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EXAMPLE Suppose you had the opportunity to invest money today to receive $1,000 one year from today. Suppose also that the average current

\ \ EXAMPLE\ Suppose you had the opportunity to invest money today to receive

$1,000

one year from today. Suppose also that the average current interest rate is

5%

. Considering that you could invest the money today and earn

5%

interest over the course of a year, the present value must be less than its future value of

$1,000

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