Question
You have just learned that you are a beneficiary in the will of your late Aunt Susan. The executrix of her estate has given you
| You have just learned that you are a beneficiary in the will of your late Aunt Susan. The executrix of her estate has given you three options as to how you may receive your inheritance. |
| Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. |
| Required: | |
| 1-a. | Calculate the present value for the following assuming that the money can be invested at 11% percent. (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.) |
| Present Value | ||
| a. | You may receive $56,000 immediately. | $ |
| b. | You may receive $79,000 at the end of ten years. | $ |
| c. | You may receive $13,000 at the end of each year for ten years (a total of $130,000). | $ |
| 1-b. | If you can invest money at a 11% return, which option would you prefer? |
|
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McGraw-Hill Education SAT 2017
Authors: Christopher Black, Mark Anestis
1st Edition
1259641651, 978-1259641657
