You have a choice between receiving $500 now and $530 in six months' time. Current...
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Accounting
You have a choice between receiving $500 now and $530 in six months' time. Current interest rates are 10% p.a. (simple interest). As a rational investor, which option would you choose and why?
a. $530 in six months' time, because $500 invested for six months is only worth $525.
b.$500 now, because it would be worth $550 in six months' time.
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