Your father offers you a choice of $130,000 in 12 years or $46,000 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 9 percent, what is the present value of the $130,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

a-2. Which offer should you choose?

• $46,000 today

• $130,000 in 12 years

b-1. Now assume the offer is $130,000 in 9 years or $46,000 today. What is the present value of the $130,000 at 9 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?

• $130,000 in 9 years

• $46,000 today