Question
You have a choice between payments options. Option 1 will pay you $75,000 now or Option 2 will pay you $125,000 five years from now.
You have a choice between payments options. Option 1 will pay you $75,000 now or Option 2 will pay you $125,000 five years from now. Suppose that you can currently purchase a 5-year certificate of deposit (CD) paying 10% annual interest compounded monthly. The future value of Option 1 is _______ and the present value of Option 2 is ________.
Please show how it was completed.
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Public Finance And Public Policy
Authors: Jonathan Gruber
6th Edition
1319105254, 9781319105259
