Question

Which of the following is least valuable? Group of answer choices

A. $100 to be paid in three years.

B. A $100 bill in your hand.

C. $1000 to be paid in four years.

D. $100 to be paid in four years.

Answer 1

The answer is

D) $100 to be paid in four years

Explanation :-

Option (c) is $1000 to be paid in four years ,it has the highest value . So, option c is not right.

Now, If we are asked to pay $100 and we have three options of paying it today, in three years or in four years, we would select to pay it in four years and the reason would be time value of money which means value of dollar today is more than the value of dollar in future.

So, out of option A, B and D , the right option is option D as it has the least value