Your father offers you a choice of $100,000 in 10 years or $46,500 today. Calculate your final answer using the formula and financial calculator methods.
1. If money is discounted at 8 percent, what is the present value of the $100,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
2. Which offer should you choose? Why?
1. Now assume the offer is $100,000 in 7 years or $46,500 today. What is the present value of the $100,000 at 8 percent for 7 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
2. Now, which offer should you choose? Why?