(b) A person is offered a gift of $5,000 now or $8,000 five years from now. If such funds could be expected toearn 8 percent over the next five years, which is the better choice?NI/Y5588PV (compute) 5,000PMTFV (compute)008,00013

Choice 1 is: Get $ 5000 now Choice 2 is: Get $8000 in five years from now The question can be solved…

Answered: (b) A person is offered a gift of…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 22E

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(b) A person is offered a gift of $5,000 now or $8,000 five years from now. If such funds could be expected to earn 8 percent over the next five years, which is the better choice? N I/Y 5 5 8 8 PV (compute) 5,000 PMT FV (compute) 0 0 8,000 13