Alexander is required to choose between two investment choices. In choice A, he receives $10,000 today, which he can invest for 3 years at 4% interest. In choice B, he receives $10,000 at the end of 3 years.

Which choice should Alexander pick and why?

He should pick choice B because the present value of $10,000 is $8,889.96, which is $1110 more than the amount obtained at the end of 3 years when choice A is selected.

He should pick choice A because, at the end of 3 years, he will receive a total of $11,248.64, which is $1,248.64 more than the amount obtained in choice B.

He should pick choice B because the present value of $10,000 is $9,950, which is only $50 more than the amount obtained at the end of 3 years when choice A is selected.

He should pick choice A because, at the end of 3 years, he will receive $14,512, which is $4,512 more than the amount obtained in choice B.