Your rich uncle has offered you one of the following four alternatives: $10,000 right now
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Question:
Your rich uncle has offered you one of the following four alternatives:
• $10,000 right now
• $2,000 at the end of each of the next eight years;
• $24,000 at the end of eight years.
• $1,000 a year forever starting in one year.
Assuming you can earn 9.5% compounded annually, rank the four alternatives from most to least attractive in terms of their value today. If your uncle is willing to give you the $2,000 a year at the beginning of each year instead of the end of each year, does this change your answer?
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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