Q 8,9

8, Cody estimates his opportunity cost on investments at 9% compounded annually. Which of the following is the best investment opportunity? To receive $100,000 today To receive $400,000 at the end of 15 years To receive $1,500 at the end of each month for 10 years compounded monthly To receive $75,000 in 5 years and $100,000 5 years later To receive S75,000 in 5 years and $175,000 10 years later 9. Patricia and Scott are ready to retire. They want to receive the equivalent of $30,000 in today's dollars at the beginning of each year for the next 20 years. They assume inflation will average 4% over the long run, and they can earn an 8% compound annual after-tax return on investments. What lump sum do Patricia and Scott need to invest today to attain their goal