Your father offers you a choice of $120,000 in 13 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 $120,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Present Value:
b-1. Now assume the offer is $120,000 in 10 years or $47,000 today. What is the present value of the $120,000 at 8 percent for 10 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Present Value: