(a) Consider the situation where you have the option of receiving $80,000 now, or receiving $120,000 in five years. If the appropriate discount rate is 8%, would you choose to receive the payment now or later?

(b) You want to invest $10,000 for one year. Your financial advisor suggests that you should invest in a savings account that pays 2.5% interest compounded quarterly. However, on the way home from your appointment, you see an advertisement for a savings account that promises to pay 2.75% compounded annually. Which one is the better deal for you?