6 our parents have made you twooffers. The first offer includesannual gifts of $4,000, $4,500,and $5,200 at the end of each ofthe next three years, respectively.The other offer is the payment ofone lump sum amount today. Youare trying to decide which offer toaccept given the fact that yourdiscount rate is 9.7 percent. Whatis the minimum amount that youwill accept today if you are toselect the lump sum offer?Multiple Choice$12,489$18,086$11,325$17,687$10,378

Present value is equivalent today to future money that is going to be received based on the interest…

Answered: our parents have made you two offers.…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 33P

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Similar questions

Your uncle gives you $92,000 as a gift. Rather than give you a lump-sum, your uncle structures the gift as an annuity that pays $16,250 per year. You will receive the first payment one year later. If the annual interest rate is 12%, how many years does it take for you to receive all the payments for this gift?
Trish receives $450 on the first of each month. Josh receives $450 on the last day of each month. BothTrish and Josh will receive payments for next four years. At a discount rate of 9.5 percent, what is thedifference in the present value of these two sets of payments?Select one:a. $151.06b. $141.80c. $162.50d. $159.08e. $154.30
please help me dont give answer in mage format
You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $50,000 today or receive payments of $641 a month for 10 years. You can earn 6.50% on your money. What option should you take and why?
You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. You can earn 6 percent on your money. Which option should you take and why?
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Your grandparents would like to establish a trust fund that will pay you and your heirs $175,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.4 percent, how much must your grandparents deposit today?
Kevin deposits a fixed quarterly amount into an annuity account for his child's college fund. He wishes to accumulate a future value of $90,000$⁢90,000 in 1616 years. Assuming an APR of 3.7%3.7% compounded quarterly, how much of the $90,000$⁢90,000 will Kevin ultimately deposit in the account, and how much is interest earned? Round your answers to the nearest cent, if necessary.
Annalise will deposit into her investment account $4,500, $1,000, and $5,500 at the end of Years 1, 2, and 3, respectively. What will her account be worth at the end of the Year 3 if she earns an annual rate of 6.15 percent? O $11,632.02 O $10,381.25 O $9,725.12 O $11,526.50 None of these answers are correct
When your son is born you want to determine what lump amount would you have to be paid into an account bearing interest of 10%/yr to provide withdrawals of $10,000 on each of your son's 18th, 19th, 20th, and 21st birthday
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Aunt Tillie has deposited $33,000 today in an account which will earn 10 percent annually. She plans to leave the funds in this account for seven years earning interest. If the goal of this deposit is to cover a future obligation of $65,000, what recommendation would you make to Aunt Tillie?

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our parents have made you two offers. The first offer includes annual gifts of $4,000, $4,500, and $5,200 at the end of each of the next three years, respectively. The other offor the at of