Your uncle offers you a choice of $115,0 in 10 years or $52,000 today, if the money is discounted at 9%, which should you do ose? 2. If you invest $9,500 per period or the fotioning number of periods how much would you have? A. 10years at 10% B. 15years at 9%

1) we would choose the second offer i. e. $52,000 today

2) For A) 10 years at 10%

Future value = $151,405.53

For B) 15 years at 9%

Future value = $278,928.70

Explanation:

1) Future value = $115,000

Time, n = 10 years

Discount rate, r = 9% = 0.09

Now,

Present value of the money provided after 10 years

= Future Value : [ (1 + r) ⁿ ]

= $115,000 : [ (1 + 0.09) ¹⁰ ]

= $48,577.24

Since,

The Present value of $115,000 is less than the money to offered today i. e $52,000

Hence, we would choose the second offer i. e. $52,000 today

2) Payment per period = $9,500

Future value = Yearly Payment * [ { (1 + r) ⁿ - 1 } : r ]

Thus,

For A) 10 years at 10%

Future value = $9,500 * [ { (1 + 0.1) ¹⁰ - 1 } : 0.1 ]

= $151,405.53

For B) 15 years at 9%

Future value = $9,500 * [ { (1 + 0.09) ¹⁵ - 1 } : 0.09 ]

= $278,928.70