Your brother has offered to give you either $60,000 today or $120,000 in 10 years. If the interest rate is 6% per year, which optionis preferable?CHDThe present value of the future amount (amount received in 10 years) is $(Round to the nearest dollar.)

When an amount is receivable, every person will choose to receive higher amount. So, in the given…

Your brother has offered to give you either $60,000 today or $120,000 in 10 years. If the interest rate is 6% per year, which option is preferable? The present value of the future amount (amount received in 10 years) is $ (Round to the nearest dollar.)

Your brother has offered to give you either $60,000 today or $120,000 in 10 years. If the interest rate is 6% per year, which option is preferable? The present value of the future amount (amount received in 10 years) is $ (Round to the nearest dollar.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

Your brother has offered to give you either $60,000 today or $120,000 in 10 years. If the interest rate is 6% per year, which option
is preferable?
CHD
The present value of the future amount (amount received in 10 years) is $
(Round to the nearest dollar.)

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