Find the FUTURE VALUE of both options below, showing all MANUAL workings using the formula Timothy is retiring from his job soon at which time his employer will make the following offer: A lump sum amount of $200,000 A sum of $15,000 at the beginning of each year for the next 25 years. If the average interest rate is likely to be 5.5% p.a. for the next 25 years, which option should Timothy choose?
Find the FUTURE VALUE of both options below, showing all MANUAL workings using the formula Timothy is retiring from his job soon at which time his employer will make the following offer: A lump sum amount of $200,000 A sum of $15,000 at the beginning of each year for the next 25 years. If the average interest rate is likely to be 5.5% p.a. for the next 25 years, which option should Timothy choose?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Find the
Timothy is retiring from his job soon at which time his employer will make the following offer:
- A lump sum amount of $200,000
- A sum of $15,000 at the beginning of each year for the next 25 years.
If the average interest rate is likely to be 5.5% p.a. for the next 25 years, which option should Timothy choose?
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