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Suppose you have won a competition and that you are given the choice between $180000 now or $10000 at the start of each year, for the rest of your life. Assume that the bank has a constant interest rate of

Suppose you have won a competition and that you are given the choice between $180000 now or $10000 at the start of each year, for the rest of your life. Assume that the bank has a constant interest rate of 6% and that you currently have no debts (so that your decision is a purely rational one, based on "present value"). 


What should you choose if you think you will live (a)until 65, (b) until 100, (c)forever? (Ignore (a) if you are over 65.)
  • Expert Answer

a Besent value of 10 000 per year for next 45 ye View the full answer


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Related Book For  answer-question
Financial Accounting and Reporting a Global Perspective

Financial Accounting and Reporting a Global Perspective

ISBN: 978-1408076866

4th edition

Authors: Michel Lebas, Herve Stolowy, Yuan Ding

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Posted Date: June 07, 2023 01:28:16
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