Question: 1. . Determine the annual simple interest rate i such that the present value at time zero of a payment of $X at time 2

1. . Determine the annual simple interest rate i such that the present value at time zero of a payment of $X at time 2 years is 80% of $X.

A. 10%

B. 12%

C. 14%

D. 16%

E. None of the above

2. What is ( ) / (i d ) when i = 5%?

A. Over 64,000,000

B. About 2,000,000

C. About 8,000

D. 1.00

E. Close to zero

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