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Suppose that you were given two choices: Choice A is that you can receive $18,000 two years from now, and Choice B is that you can receive $15,000 right now. APR (Annual Percentage Interest Rate, r) is 10%. Which would you choose Choice A or Choice B, if interest compounded semiannually for the holding periods? Now suppose interest compounded continuously at the same APR of 10%. Which would you choose Choice A or Choice B?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91567374

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