Calculate the present values of the given options

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Reference no: EM131567112

Question: Lucy is offered the choice between the following three options:

(a) She gets $3200 each year for 10 years. First payment due after 1 year

(b) She gets $7000 today, and thereafter $3000 each year for 5 years. First payment after 1 year

(c) She gets $4000 each year for 10 years. First payment only due after 5 years .The annual interest rate is 8%.

Calculate the present values of the three options. What would you advise Lucy to choose?

Reference no: EM131567112

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