GB 519-Marilyn’s parents have agreed to help her purchase a new car upon graduation
Question # 00321626
Posted By:
Updated on: 06/23/2016 12:24 AM Due on: 06/23/2016
Marilyn’s 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 $3,640 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 $16,330. Marilyn can invest the money at a 5% rate.
| Option 1 | Option 2 | |
| Present value |
What is the present value of option one and option two?
Which option should Marilyn take?
-
Rating:
/5
Solution: GB 519-Marilyn’s parents have agreed to help her purchase a new car upon graduation