P3-6 (similar to)

Question Help

Suppose the risk-free interest rate is 3.5%.

a. Having $200 today is equivalent to having what amount in one year?

b. Having $200 in one year is equivalent to having what amount today?

c. Which would you prefer, $200 today or $200 in one year? Does your answer depend on when you need the money? Why or why not?

a. Having $200 today is equivalent to having what amount in one year?

Having $200 today is equivalent to having $nothing in one year.(Round to the nearest cent.)