You had bought prize bonds and you won one of them. Now you are given three options to collect your reward. You can elect to receive a lump sum today of PKR 50 million, or to take 20 end of year payments of PKR 3 million, or to receive 10 end of year payment of PKR 9.5 million. If you think you can earn 7% annually, which should you choose. Support your choice with calculated values.
You had bought prize bonds and you won one of them. Now you are given three options to collect your reward. You can elect to receive a lump sum today of PKR 50 million, or to take 20 end of year payments of PKR 3 million, or to receive 10 end of year payment of PKR 9.5 million. If you think you can earn 7% annually, which should you choose. Support your choice with calculated values.
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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You had bought prize bonds and you won one of them. Now you are given three options to collect your reward. You can elect to receive a lump sum today of PKR 50 million, or to take 20 end of year payments of PKR 3 million, or to receive 10 end of year payment of PKR 9.5 million. If you think you can earn 7% annually, which should you choose. Support your choice with calculated values.
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