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What is the present value of $1,000 due in 17 years at a 5 percent interest rate and 11 percent interest rate? Do not round
What is the present value of $1,000 due in 17 years at a 5 percent interest rate and 11 percent interest rate? Do not round intermediate calculations. Round your answers to the nearest cent.
Present value at 5%: $ ______
Present value at 11%: $ ______
Explain why the present value is lower when the interest rate is higher.
- The less interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future.
- The more interest you can earn during an investment period, the less you need to invest today to receive a particular amount in the future.
- The more interest you can earn during an investment period, the more you need to invest today to receive a particular amount in the future.
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