Your business associate who owes you $9250 offers to pay you either $7400 now or else to pay you 5 yearly installments of $1850, the first installment paid now. Assume a 5.3% market interest rate, compounded continuously.

How much would you have at the end of 5 years if you choose to take the $ 7400 offer now, and you use the market to earn interest on the funds? $

How much would you have at the end of 5 years if you choose to take the installments each year, and you still used the market to earn interest on the the funds? $

Is it better to take the lump sum?
(Y for yes, N for no.)

Question

Your business associate who owes you $9250 offers to pay you either $7400 now or else to pay you 5 yearly installments of $1850, the first installment paid now. Assume a 5.3% market interest rate, compounded continuously.

How much would you have at the end of 5 years if you choose to take the $ 7400 offer now, and you use the market to earn interest on the funds? $

How much would you have at the end of 5 years if you choose to take the installments each year, and you still used the market to earn interest on the the funds? $ 
 
Is it better to take the lump sum?  
 (Y for yes, N for no.)

pulsified333 · Answer

@dan815

nottim · Answer

Did you calculate the lump sum?

pulsified333 · Answer

havent done any of it ;(

dan815 · Answer

noooooooooooooo gimmmeeeee a fun number theory

dan815 · Answer

How much would you have at the end of 5 years if you choose to take the $ 7400 offer now, and you use the market to earn interest on the funds? $ 
5.3% dude

dan815 · Answer

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