If Cirstino saves everything, after 2 years he will have in his account: FV_(2)=80,000,000*(1+0.9)+80,000,000=167,200,000$ Problem 3: Loan Sharks You expect a payment of $5,000 in two years from project you completed last summer, and you already have the post-dated check. Unfortunately, you need the money right now so you visit your local loan, who is happy to cash-advance your check for the friendly discount rate of either 20% with annual compounding or 19% with continuous compounding. How much would you get with the first option? The first option provides: PV=(5,000)/((1+0.2)^(2))=3,472$ How much would you get with the second option? The second option provides: PV=5,000*e^(-0.19*2)=3,419$ Which option should you choose? You should choose the first option b