Suppose that the projected lifetime earnings gains from migration exceed the cos

Question

Suppose that the projected lifetime earnings gains from migration exceed the costs of moving. If a person considers the present value of their lifetime earnings gains, they would find that the 1 compounded present value of their lifetime earnings gains would be lower than their lifetime earnings gains. 2 discounted present value of their lifetime earnings gains would be lower than their lifetime earnings gains. 3 discounted present value of their lifetime earnings gains would be higher than their lifetime earnings gains. 4 compounded present value of their lifetime earnings gains would be higher than their lifetime earnings gains.

Explanation / Answer

The answer is 4. Because one's present value of gains compounded will always be higher than their overall lifetime gains without compounding, since when one compounds it carries over the overall value. Hope this helps, best of luck.

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