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You have £100,000. You are faced with three alternatives. Your discount rate is 8% per annum. The three alternatives fro
Posted: Thu May 19, 2022 11:00 am
by answerhappygod
- You Have 100 000 You Are Faced With Three Alternatives Your Discount Rate Is 8 Per Annum The Three Alternatives Fro 1 (135.65 KiB) Viewed 70 times
You have £100,000. You are faced with three alternatives. Your discount rate is 8% per annum. The three alternatives from which you may choose are summarised as follows: Option A: £250,000 in 12 years with certainty Option B: £1,000 every month for 10 years with monthly compounding Option C £5,000 every year for life (indefinitely) For each option, calculate the present value and then explain your choice for the best option (10 marks]