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You just received an insurance settlement offer related to an accident you had. The offer gives you a choice of one of the following three
You just received an insurance settlement offer related to an accident you had. The offer gives you a choice of one of the following three offers:
Option A: $ on the first day of each year for years Option B: $ on the end of each year for years Option C: $ as a lump sum payment today You can earn percent on your investments.
Which one of the following statements is correct given this information?
Option is the best choice since you can earn percent on the entire lump sum starting immediately.
Option B is the best choice since it offers the largest annual payments.
Option A is the best choice since it has the largest present value.
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