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5. (3 Marks) A person can purchase a lot for $200,000 cash today. Alternatively, they can pay $50,000 today, $60,000 in one year and $120,000

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5. (3 Marks) A person can purchase a lot for $200,000 cash today. Alternatively, they can pay $50,000 today, $60,000 in one year and $120,000 in two years. What is the present value of the second option if the interest rate is 6% compounded semi-annually in the first year and 3% compounded monthly in the second year? Which option should the buyer choose

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