Would your decision change in the scenario

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Reference no: EM133664211

Problem: This question has two parts (a) and (b) 6 Quiz Information On your 21st birthday, your wealthy grandparents offer you a generous cash present. They give you the following options. Option 1: $50,000 now. Option 2: $75,000 on your 25th birthday. Option 3: $4,000 a year in perpetuity. Option 4: $6,000 a year until you turn 30 with the first payment now and the last payment on your 30th birthday. You estimate that in the current market condition, you can invest your money at 6% per annum. Which option would you choose? While the current interest rate is 6% per annum, you feel that interest rate is likely to increase in the future so an interest rate of 8% per annum is more appropriate in valuing the above birthday present options. Would your decision change in this scenario?

Reference no: EM133664211

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