asked 169k views
4 votes
Suppose Emilio offers you $500 today or $X in 10 years. If the interest rate is 6 percent, then at what value of X would you be indifferent between the two options

asked
User Jeffkee
by
8.5k points

1 Answer

4 votes

This question is impossible and implausible

Who is Emilio? How do we know he'll be around in 10 years? IS he good for the money, or is it counterfeit? Are we adjusting for inflation? The dollar is worth more in Malaysia than the U.S., so where are we starting and where are we ending? There's just not enough data here.

answered
User Rene De La Garza
by
8.6k points
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