Formula and financial calculator methods

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Reference no: EM13971653

Your father offers you a choice of $105,000 in 12 years or $47,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a-1. If money is discounted at 8 percent, what is the present value of the $105,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

a-2. Which offer should you choose?

b-1. Now assume the offer is $105,000 in 9 years or $47,000 today. What is the present value of the $105,000 at 8 percent for 9 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b-2. Now, which offer should you choose?

Reference no: EM13971653

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