b) Maggie Moser has a $2,000 overdue debt for text books and supplies at Julies Bookstore. She has only $700 in her checking account and doesnt want her parents to know about this debt. Julies tells her that she may settle the account one of two ways since she cant pay it all now:

1. Pay $700 now and $1,600 when she completes her degree, two years from today.

2. Pay $2,500 one year after completion of her internship, three years from today.

Assuming that the cost of money is the only factor in Maggies decision and that the cost of money to her is 10%, which alternative should she choose? Your answer must be supported with calculations.