You have recently received a legal settlement that offers two payout options. You can choose to receive $60,000 immediately, or $110,000 eleven years from now. Which option would be more valuable if the annual interest rate is 8%?

Question

Answer

None of the answer options is correct

Answer

I would choose the $60,000 now because it has a higher value than receiving $110,000 in 11 years.

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I would choose to receive $110,000 in 11 years because it is worth more than $60,000 today.

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I am indifferent between the two options because they have the same value.

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It does not matter whether I choose $60,000 today or $110,000 in 11 years since both have the same present value

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You have recently received a legal settlement that offers two payout options. Yo...

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