Your father offers you a choice of $125,000 in 12 years or $49,000 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 12 percent, what is the present value of the $125,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

a-2. Which offer should you choose?

$125,000 in 12 years

$49,000 today

b-1. Now assume the offer is $125,000 in 9 years or $49,000 today. What is the present value of the $125,000 at 12 percent for 9 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b-2. Now, which offer should you choose?

$49,000 today

$125,000 in 9 years