Question
Alysha has to choose between two investments that have the same cost today. Both investments will ultimately pay $1,100 but at different times, as shown
Alysha has to choose between two investments that have the same cost today. Both investments will ultimately pay $1,100 but at different times, as shown in the table below. If Alysha does not choose one of these investments, she could leave the funds in a bank account paying 5 percent per year. Which investment should Alysha choose? (Round answer to 2 decimal places, e.g. 125.12. Do not round your intermediate calculations.)
| Year | Investment A | Investment B | ||
|---|---|---|---|---|
| 1 | $0 | $200 | ||
| 2 | $400 | $500 | ||
| 3 | $700 | $400 |
- Present value of Investment A = $ ??
- Present value of Investment B = $ ??
- Alyssa would prefer: A OR B?
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Foundations Of Statistics For Data Scientists With R And Python
Authors: Alan Agresti
1st Edition
0367748452, 978-0367748456
