Question 19

Your father offers you a choice of $120,000 in 13 years or $47,000 today Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 8 percent, what is the present vallue of the $120,000 (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value a-2. Which offer should you choose? $120.000 in 13 years O $47,000 today b-1. Now assume the offer is $120,000 in 10 years or $47,000 today. What is the present value of the $120,000 at 8 percent for 10 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value b-2. Now, which offer should you choose? $47,000 today $120,000 in 10 years