Problem Statement: ME Board April 1996
Consider a deposit of P600.00 to be paid back in one year by P700.00. What are the conditions on the rate of interest, i% per year compounded annually such that the net present worth of the investment is positive? Assume i is greater than or equal to 0.
- A. 0 ≤ i < 14.3%
- B. 0 ≤ i <16.7%
- C. 12.5% ≤ i <14.3%
- D. 16.7% ≤ i <100%
The conditions on the rate of interest is 0 ≤ i <16.7%.
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