17. Which of the following investme ent options is most valuable? Assume positiv

Question

17. Which of the following investme ent options is most valuable? Assume positive interest rate A. receiving $10.000 Inday B. receiving $1,000 per year for 10 years with the first C. receiving $2,000 per year for five years beginning nest year D. receiving 35,000 today and $5,000 next year payment made today t yeanl 18. You have $2,000 in your account today. And you will deposit $500 per year for 10 years into the account that earns 5%. The first deposit is made years from today? A. 8.288.95 B. 7,513.28 C. 10,068.42 next year. How much will be in the account 15 D, 12,184.37 E. 15.207.20

Explanation / Answer

17. The basic premise of the solution lies in a concept called as 'Time value of money'

Time value of money is the idea that money that is available at the present time is worth more than the same amount in the future, due to its potential earning capacity.

So essentially it should be now logically clear to you that receiving 10,000 today is the best value investment option.(Since we are here dealing with the same total amount i.e. 10000 in all the scenarios)

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.