13. You are going to buy a new computer. The shop provides you two options: 1. Pay $2,500 today for the computer; or, 2. Pay $200 today, $1,800 a year from today, $700 two years from today, $100 three years from today, and finally $100 four years from today. If the discount rate is 15%, which option would you prefer? Hints: You compare the PV of the two choices. PV of 2,500 today is still 2,500 (FV-2,500, I/YR-15, N-ZERO, so PV-2,500). Then you need to get the PVs of the other choice and compare with 2,500. For this question, the lower PV, the better for you because you pay less. But for the shop that sell you the computer, the higher PV, the better because he gets higher pays). Choice 1: 2,500 0 1 2 3 Choice 2: 200 1,800 700 100 0 1 2 3 a. Choice 1 is better b. Choice 2 is better c. Both choices are the same 100