Author Question: From the perspective of economic theory, property rights are A) human rights. B) just as ... (Read 160 times)

haleyc112 · **on:** Jun 29, 2018

From the perspective of economic theory, property rights are

A) human rights.
B) just as important as human rights.
C) less important than human rights.
D) more important than human rights.
E) usually in conflict with human rights.

Question 2

George is offered an investment option by his friend. He asks George for 6,900 and offers to repay him 12,990 after a period of ten years.

George considers investing his money in his friend's project; however, the bank in his community offers an annual rate of interest of 9 on every deposit. Which do you think is the better investment option for George?

lin77x · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

To compare between the two investments, it is necessary to calculate the required principal to be deposited in the bank at 9 rate of interest for ten years to generate 12,990.
The present value of 12,990 at 9 rate of interest is 12,990/(1.09 )10 = 5,487.12.
Hence, if the rate of interest is 9, the sum of 12,990 can be earned by depositing approximately 5,488 in the bank for ten years.
Because George needs to invest a smaller amount of money to generate the same return from the bank, investing in the bank is a better option for him.