Breakfast cereal competition

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Reference no: EM131453376

You won a breakfast cereal competition. You can choose one from the following prizes: 1) $200,000 today 2) $300,000 at the end of 5 years 3) $24,000 a year forever 4) $37,500 a year for the next 10 years 5) $12,500 next year and increasing thereafter by 6% a year forever If the interest rate is 12% what is the most valuable prize? If the interest rate is 8% what is the most valuable prize?

Reference no: EM131453376

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