Question: Your uncle has given you three alternatives for your inheritance. You can have $5,000 now; $1,000 per year (at the end of each year) for

Your uncle has given you three alternatives for your inheritance. You can have $5,000 now; $1,000 per year (at the end of each year) for the next eight years; or $12,000 at the end of eight years. You assume that you could earn 11% interest annually.

1. Which inheritance alternative would be best? Why?

2. Would your decision be different if you could earn interest at 12%?

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