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Your wealthy aunt has told you that she will give you $10,000 when you graduate from college. If you graduate sooner by one year and graduate two years from now rather than the expected three years, how
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Your wealthy aunt has told you that she will give you $10,000 when you graduate from college. If you graduate sooner by one year and graduate two years from now rather than the expected three years, how will the present value of your gift be changed?

Multiple Choice

The present value will remain constant.

The present value will increase.

The present value will decrease.

The present value will equal $10,000.

The present value will be greater than $10,000.

User Hpique
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2 Answers

2 votes

Answer:

Explanatioon:

User Bvanlew
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1 vote

Answer:

The present value will increase.

Step-by-step explanation:

Since you will be receiving your money the same as today, meaning that she promised you 10,000 today and you´ll get them in a few years, that money will be worth less due to the inflation, so the present value of the money will increase, because the 10,000 dollars of today will be more valuabel than 10,000 dollars in two years because those 10,000 dollars will have less purchasing power than the present 10,000 dollars, that is why the present value will increase.

User Bushra
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