Compute the present value of each alternative

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Your grandfather has offered you a choice of one of the three following alternatives: $13,000 now; $6,500 a year for eight years; or $86,000 at the end of eight years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. Assuming you could earn 11 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) a-2. Which alternative should you choose? $86,000 received at end of eight years $6,500 received each year for eight years $13,000 received now b-1. If you could earn 12 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) b-2. Which alternative should you choose? $86,000 received at end of eight years $6,500 received each year for eight years $13,000 received now

Reference no: EM131586526

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