Question
Your father offers you a choice of $120,000 in 11 years or $48,500 today. Use Appendix B as an approximate answer, but calculate your final
Your father offers you a choice of $120,000 in 11 years or $48,500 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 11 percent, what is the present value of the $120,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) a-2. Which offer should you choose? $120,000 in 11 years $48,500 today b-1. Now assume the offer is $120,000 in 8 years or $48,500 today. What is the present value of the $120,000 at 11 percent for 8 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) b-2. Now, which offer should you choose? $120,000 in 8 years $48,500 today
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