Unit # 6 - Testbank #2 - Part B

Marilyns parents have agreed to help her purchase a new car upon graduation in four years. They have given her two choices. The first choice is that they will give her $3,890 each year for the next four years for her to invest herself. The second choice is that they will wait four years and give her $17,440. Marilyn can invest the money at a 4% rate.

Please answer - Part B

If Marilyn can invest the money at 8%, which options should she choose? (Round present value factor calculations to 4 decimal places, e.g. 1.2512 and final answers to 0 decimal places e.g. 58,971.)

Your answer is correct Which option should Marilyn choose? (Round present value factor calculations to 4 decimal places, e.g. 1.2512 and final answers to 0 decinnal places e.g. 58,971.) option 1 option 2 Present value 14120 14908 Marilyn should take option 2 v