Investment opportunity 1. Your parents are interested in getting advice on what is the best outcome at the end of a six-year period for investing a sum of money in the following options, given a 9% per annum earning rate. What is the preferred option? a. Invest $8,000 as a lump sum today. b. Invest $5,000 at the end of each of the next six years. c. Invest a lump sum of $6,000 today and $1,000 at the end of each of the next six years. d. Invest $1,200 at the end of years one, three and five.
Investment opportunity 1. Your parents are interested in getting advice on what is the best outcome at the end of a six-year period for investing a sum of money in the following options, given a 9% per annum earning rate. What is the preferred option? a. Invest $8,000 as a lump sum today. b. Invest $5,000 at the end of each of the next six years. c. Invest a lump sum of $6,000 today and $1,000 at the end of each of the next six years. d. Invest $1,200 at the end of years one, three and five.
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 16PROB
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Investment opportunity 1.
Your parents are interested in getting advice on what is the best outcome at the end of a six-year period for investing a sum of money in the following options, given a 9% per annum earning rate. What is the preferred option?
a. Invest $8,000 as a lump sum today.
b. Invest $5,000 at the end of each of the next six years.
c. Invest a lump sum of $6,000 today and $1,000 at the end of each of the next six years. d. Invest $1,200 at the end of years one, three and five.
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