You have $10,000 in account A that will pay you $100 per month (starting next month) for the next 12 months. You can withdraw the money from Account A today with a penalty of $100. That is to say, if you withdraw your money, you will only get $9,900 today.

You can invest your money in a different account, Account B that will pay you $105 per month (starting next month) for the next 12 months.

Your investments earn 5% APR (compounded monthly).

Should you keep your money in Account A or withdraw it and invest it in Account B? How much do you gain in present value terms?

Lose $41 by withdrawing the money from Account A and investing in Account B.

Gain $59 by withdrawing the money from Account A and investing in Account B.

Gain $41 by withdrawing the money from Account A and investing in Account B.

Lose $59 by withdrawing the money from Account A and investing in Account B.