(L.OBJ. 3) Using the time value of money to compute the present and future values of single lump sums and annuities [10—15 min]
Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose):
1. $7550 a year at the end of each of the next eight years
2. $48,350 (lump sum) now
3. $100,050 (lump sum) eight years from now
Requirement
1. Calculate the present value of each scenario using an 8% discount rate. Which scenario yields the highest present value? Would your preference change if you used a 10% discount rate?
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.