Your grandfather has offered you a choice of one of the three following alternatives: $10,000 now; $4,800 a year for eight years; or $56,000 at the end of eight years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. Assuming you could earn 9 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) a-2. Which alternative should you choose? multiple choice 1 $56,000 received at end of eight years $4,800 received each year for eight years $10,000 received now b-1. If you could earn 10 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) b-2. Which alternative should you choose? multiple choice 2 $56,000 received at end of eight years $4,800 received each year for eight years $10,000 received now
Your grandfather has offered you a choice of one of the three following alternatives: $10,000 now; $4,800 a year for eight years; or $56,000 at the end of eight years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.
a-1. Assuming you could earn 9 percent annually, compute the
a-2. Which alternative should you choose?
multiple choice 1
-
$56,000 received at end of eight years
-
$4,800 received each year for eight years
-
$10,000 received now
b-1. If you could earn 10 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
b-2. Which alternative should you choose?
multiple choice 2
-
$56,000 received at end of eight years
-
$4,800 received each year for eight years
-
$10,000 received now
Step by step
Solved in 3 steps
If you could earn 10 percent annually, compute the
by Bartleby Expert
