Award: $5\mathrm{.}00$ points

Problem $9-8($Algo$)$ Present value $[$LO$9-3]$

Your father offers you a choice of $$130,000$ in $13$ years or $$49,500$ today. Use Appendix $B_{?}$ as an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a$-1.$ If money is discounted at $8$ percent, what is the present value of the $$130,000?$ Note: Do not round intermediate calculations. Round your final answer to $2$ decimal places.

Present value

a$-2.$Which offer should you choose?

$$130,000$ in $13$ years

$$49,500$ today

b$-1.$ Now assume the offer is $$130,000$ in $10$ years or $$49,500$ today. What is the present value of the $$130,000$ at $8$ percent for $10$ years?

Note: Do not round intermediate calculations. Round your final answer to $2$ decimal places.

Present value

b$-2.$Now, which offer should you choose?

$$130,000$ in $10$ years

$$49,500$ today