Should donald take the money now or take the annuity

Assignment Help Macroeconomics

Reference no: EM132154269

Question: Suppose Donald is expecting an inheritance that will pay him $85,000 at the end of each year for the next 40 years. Since his inheritance is guaranteed money, the bank offers him $1.9 million now? Should Donald take the money now or take the annuity if the interest rate is 3%. Explain.

Reference no: EM132154269

Questions Cloud

Which strategy is mostly likely being implemented : As acquisitions increase in the beer and soft drink industry, which strategy is mostly likely being implemented?

Classical economists preferred : Classical economists preferred perfect competition to monopoly because it fulfilled all but which one of the following basic goals?

Calculate a value for the quota rent : Suppose instead of the quota described in Part E that this country negotiates a voluntary export restraint of 12 units with its chief foreign supplier.

What is the total cost to garage for purchsing item annually : Holding cost is 10% of the purchase price per unit per year. What is the total cost (TC) to the garage for purchsing this item annually (2 decimal places)?

Should donald take the money now or take the annuity : Suppose Donald is expecting an inheritance that will pay him $85,000 at the end of each year for the next 40 years. Since his inheritance is guaranteed money.

What size should the tax be : Suppose the figure to the right represents the production of a manufactured good. Production of this good generates volatile organic compounds.

Herzberg two-factor approach to motivation : Explain the key differences in the two major factors in Herzberg's Two-Factor Approach to Motivation: Hygiene factors and Motivators.

Decided to weight three factors in making the decision : A company is looking to build a new factory. The company has decided to weight three factors in making the decision:

Important part of such a contract : Also seen with these contracts was a pre-determined mandatory retirement date; why would this be an important part of such a contract?

User Account

All Pages