Question
Your grandmother has told you she can either give you $4,200 now or $5,400 when you graduate from college in three years. Your savings account
Your grandmother has told you she can either give you $4,200 now or $5,400 when you graduate from college in three years. Your savings account earns 7% interest, compounded annually. Which option would be worth more to you now, and how much more? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Round your PV factor to 4 decimal places and final answer to 2 decimal places.) |
A. The $5,400 in the future is worth $200.00 more than the $4,200 now.
B. The $4,200 now is worth $200.00 more than the $5,400 in the future.
C. The $4,200 now is worth $208.02 more than the $5,400 in the future.
D. The $5,400 in the future is worth $208.02 more than the $4,200 now.
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