If the interest rate is 8%, which of these investments would you prefer?

Multiple Choice

• A payment of $3,000 today.

• A payment of $350 a year for 30 years starting in year 2.

• A perpetuity of $250 a year starting in year 3.

• A payment of $500 in year 1, a payment of $1,800 in year 3, and a payment of $2,200 in year 6.