You have just found the apartment of your dreams. Before you sign the three-year lease, you have to decide how to pay your rent. Your landlord has given you three options: (1) monthly payments of $925.00 each at the end of the month for 36 months with interest compounded monthly; (2) yearly payments of $11,100, due today and due at the beginning of each year after with interest compounded annually; or (3) $33,200 today. 

You can borrow and invest at an interest rate of 9%. Which option would you choose? Why?

Answer rating: 100% (QA)

To determine the best option we need to calculate the present value of each option and choose the on... View the full answer