Much to your surprise, you were selected to appear on the TV show "The Price is Right." As a result of your prowess in identifying how many rolls of toilet paper a typical American family keeps on hand, you win the opportunity to choose one of the following:$1,400 today, $5,000 in 14 years, or $27,000 in 26 years. Assuming that you can earn 6 percent on your money, which should you choose?
Much to your surprise, you were selected to appear on the TV show "The Price is Right." As a result of your prowess in identifying how many rolls of toilet paper a typical American family keeps on hand, you win the opportunity to choose one of the following:$1,400 today, $5,000 in 14 years, or $27,000 in 26 years. Assuming that you can earn 6 percent on your money, which should you choose?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
(Present-value comparison) Much to your surprise, you were selected to appear on the TV show "The Price is Right." As a result of your prowess in identifying how many rolls of toilet paper a typical American family keeps on hand, you win the opportunity to choose one of the following:$1,400 today, $5,000 in 14 years, or $27,000 in 26 years. Assuming that you can earn 6 percent on your money, which should you choose?
f you are offered
$5,000 in 14 years and you can earn 6 percent on your money, what is the present value of $5,000?
$______________( round to the nearest cent)
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