Question: Your rich uncle has offered you a choice of one of the following three alternatives: RM10,000 now; RM2,000 a year for eight years; or RM24,000

Your rich uncle has offered you a choice of one of the following three alternatives: RM10,000 now; RM2,000 a year for eight years; or RM24,000 at the end of eight years.

Required:

(i) Calculate which of the above options should you choose if you could earn 12 per cent

annually.

(ii) From part (i) above, explain the reason why did you use the formula to make the

decision.

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