Your grandfather has offered you a choice of one of the three following alternatives: $10,500 now; $5,000 a year for nine years; or $61,000 at the end of nine years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a-1. Assuming you could earn 7 percent annually, compute the present value of each alternative:

Note: Do not round intermediate calculations. Round your final answers to 2 decimal places.

	Present Value
$10,500
$5,000
$61,000

a-2. Which alternative should you choose?

multiple choice

$61,000 received at end of nine years

$5,000 received each year for nine years

$10,500 received now

b-1. If you could earn 8 percent annually, compute the present value of each alternative:

Note: Do not round intermediate calculations. Round your final answers to 2 decimal places.

	Present Value
$10,500
$5,000
$61,000

b-2. Which alternative should you choose?

multiple choice

$5,000 received each year for nine years

$61,000 received at end of nine years

$10,500 received now