Question 3

Your mom is thinking of retiring. Her retirement plan will pay her either $225,000 immediately on retirement or $315,000 five years after the date of her retirement. Which alternative should she choose if the interest rate is. 0% per year? 8% per year? 20% per year? 0% per year? If the interest rate is 0% per year, the PV of the amount to be received five years after retirement is. (Round to the nearest dollar.) Which alternative should your mom take in this case? (Select the best choice below.) Take the money now Wait until 5 years after retirement. 8% per year? If the interest rate is 8%. the PV of the amount to be received five years after retirement is $ (Round to the nearest dollar) Which alternative should your mom take in this case? (Select the best choice below.) Take the money now Wait until 5 years after retirement. 20% per year? If the interest rate is 20%, the PV of the amount to be received five years after retirement is $ (Round to the nearest dollar)