You have the choice of receiving $100,000 now or $43,000 now and another $70,000 three years from now. In terms today's dollar, which choice is better and by how much? Money is worth 6.5% compounded annually Which choice is better? A. They are equal in value. B. The choice of $43,000 now and $70,000 in three years is better. OC. The choice of $100,000 now is better. The better choice is greater than the alternative choice by $ in terms of today's dollar (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)

You have the choice of receiving $100,000 now or $43,000 now and another $70,000 three years from now. In terms today's dollar, which choice is better and by how much? Money is worth 6.5% compounded annually Which choice is better? A. They are equal in value. B. The choice of $43,000 now and $70,000 in three years is better. OC. The choice of $100,000 now is better. The better choice is greater than the alternative choice by $ in terms of today's dollar (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 9FPE

See similar textbooks

Similar questions

If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
How much would you invest today in order to receive $30,000 in each of the following (for further instructions on present value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%
How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
Suppose you have a choice between receiving $5,000 today or $10,000 in five years. You believeyou can earn 10% on the $5,000 today, but want to know what the $5,000 will be worth in fiveyears
Your father offers you a choice of $105,000 in 12 years or $47,000 today. If money is discounted at 8 percent, which option should you choose? If money is still discounted at 8 percent, but your choice is between $105,000 in 9 years or $47,000 today, which should you choose?
Imagine you received two offers. You need to decide which one means more money for you! OFFER #1: Right away, you receive $2,490,000. Also, you will receive 40 back-to-back payments of $1,245, 000 each, six months apart, and the first one of these will take place in one year. The discount rate is 10 percent, with daily compounding. OFFER #2: Right away, you receive $25 million. And nothing else in the future. To make your decision, you need to first figure out how much Offer #1 is worth to you in today's dollars. The answer is: $____ . ( Assume thirty days in each month and twelve months in each year.) (Do not round intermediate calculations. Round your final answer to 2 decimal places, e.g., 12.34.)
You are scheduled to receive $40,000 in two years. When you receive it, you will invest it for 6 more years at 7 percent per year. How much will you have in 8 years? Multiple Choice $45,837.07 $63,030.67 $57,027.75 $68,727.45 $60,029.21
Ms. Early Saver has decided to invest $1,000 at the end of each year for the next 10 years, then she will just let the amount compound for 25 additional years. Her brother, Late Saver, has a different investment program: He will invest nothing for the next 10 years, but will invest $1,000 per year (at the end of each year) for the following 25 years. If we assume a 3% percent rate of return, compounded annually, which investment program will be worth more 35 years from now? If instead, the assumed interest rate is 8% percent rate which investment program will be worth more in 35 years? Are the results with different interest rates different? Using your results elaborate on the power of compounding and how it impacts savings in the long run.