Question: Can someone help me understand how to work this problem? Your father offers you a choice of $135,000 in 13 years or $46,500 today. Use

Can someone help me understand how to work this problem?

Your father offers you a choice of $135,000 in 13 years or $46,500 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 10 percent, what is the present value of the $135,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

a-2. Which offer should you choose?

	$135,000 in 13 years
	$46,500 today

b-1. Now assume the offer is $135,000 in 10 years or $46,500 today. What is the present value of the $135,000 at 10 percent for 10 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

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

	$46,500 today
	$135,000 in 10 years

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