You inherit $576,000. You can receive the $576,000 in one lump sum payment today or, alternatively, receive two amounts: $376,000 in 11 months and $220,000 in 21 months from today. If you can earn 8.9% per annum compounding monthly on your monies, what is the value of the option to receive two payments (in present day value)?

Answer rating: 100% (QA)

Since one lump su... View the full answer