Much to your surprise, you were selected to appear on the TV show "The Price is Right." As a result of your prowess in identifying how many rolls of toilet paper a typical American family keeps on hand, you win the opportunity to choose one of the following:

1,500

today,

5,000

in

10

years, or

22,000

in

29

years. Assuming that you can earn

7

percent on your money, which should you choose?

If you are offered

$5,000

in

10

years and you can earn

7

percent on your money, what is the present value of

$5,000?