# 2. If the interest rate is 5%

**Question description**

2. If the interest rate is 5%, approximately what is the present value of a $300,000 expense occurring two years from today?A.$272,109B.$310,000C.$300,000D.$330,750Suppose a project requires the lease of a crane. You need the crane for the next 2 years. Your company wants to pay the lowest present value possible. The crane company offers you the following options for the lease payments:A. pay $40,000 now and $50,000 in 1 year from nowB. pay $110,000 in 2 years from nowC. pay $86,000 now3. If the interest rate is 0%, which option do you choose?c4. If the interest rate is 5%, which option do you choose?c5. If the interest rate is 10%, which option do you choose?a6. If the interest rate is 20%, which option do you choose?

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