Differentiate between principal and time value of money. John invests $100 in a bank for a year. At the end of the year he receives $125. What is the principal and time value of money in this case?
What will be an ideal response?
The amount of the original investment is referred to as principal, while time value of money is the interest or payment received for temporarily giving up the use of money that has been invested.
In this case $100 is the principal, while ($125 - $100 ) or $25 is the time value of money.
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Refer to Figure 11-6. In the figure above which letter represents the average total cost curve?
A) A B) B C) C D) D
In which statement(s) is "supply" used correctly? (I) "An increase in the price of flour will increase the supply of flour." (II) "As the cost of producing flour rises, the supply of flour will tend to fall."
a. in both statements I and II b. in statement I only c. in statement II only d. in neither statements I nor II