Suppose the interest rate is 4.1 %

a. Having $250 today is equivalent to having what amount in oneyear?

b. Having $ 250 in one year is equivalent to having what amounttoday?

c. Which would youprefer, $ 250

$250 today or $ 250

$250 in oneyear? Does your answer depend on when you need themoney? Why or whynot?

"Because money today is worth more than money in thefuture, $ 250

$250 today is preferred to $ 250

$250 in one year. This answer is correct even if youdon't need the moneytoday, because by investing the $ 250

$250 you receive today at the current interestrate, you will have more than $ 250

$250 in oneyear."

Is the above statement true orfalse?