Begin with a single sum of money at period 0. First, calculate a future value of

Question

Begin with a single sum of money at period 0.  First, calculate a future value of that sum at 12.01%.  Then discount that future value back to period 0 at 11.99%.  In relation to the initial single sum, the discounted future value:

(A)  Is greater than the original amount

(B)  Is less than the original amount

(C) Is the same as the original amount

(D) Cannot be determined with the information given

(A)  Is greater than the original amount

(B)  Is less than the original amount

(C) Is the same as the original amount

(D) Cannot be determined with the information given

Explanation / Answer

(B)  Is less than the original amount

(B)  Is less than the original amount

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