Sam just won some valuable sculptures in a contest. He wants to sell them and has received two comparable offers. Buyer 1 is offering $50,000, but wants Sam to keep the sculptures for 3 years before the buyer can pay him for them. Buyer 2 is offering $35,000 to buy the sculptures today. If Sam takes Buyer 2's offer, he can invest the money in an account that earns 9.5%, compounding monthly. Based on this 9.5% compounding discount rate, what is the present value of Buyer 1's offer? Which offer should Daniel take?

Answer rating: 100% (QA)

SOLUTION To determine which offer Sam should take we need to compare the present value of Buyer 1s o... View the full answer