you won the lottery and can recieve either (1) 60,000 today or (2) 10,000 one ye

Question

you won the lottery and can recieve either (1) 60,000 today or (2) 10,000 one year from today plus 25,000 two years from today plus 35,000 three years from today. you plan to use the money to pay for your childs college educaiton in 15 years. you shoud

a. take option two becuase you get 70,000 rather than 60,000 regardless of current interest rates

b. take the 60,000 today because of the time value of money regardless of current interest rates

c. take the 60,000 today only if the current interest rate is at least 16.7%

d. take the 60,000 today if you can earn 6.81% per year or more on your investments

Explanation / Answer

d. take the $60,000 today if you can earn 6.81% per year or more on your investments

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