You just won a prize that comes with two payout choices. The first option is to get $100,000 right now and nothing hereafter. The second option is to get $94,000 right now and and $10,000 three years from now (and nothing after that). If your discount rate is 8 %, which should you take?After comparing the $100,000,000 for the first option and the 101,938.32 for the second option, you should choose: A. First Option B. either option, as they are equal C.second option

1 answer
Question:

You just won a prize that comes with two payout choices. The first option is to get $100,000 right now and nothing hereafter. The second option is to get $94,000 right now and and $10,000 three years from now (and nothing after that). If your discount rate is 8 %, which should you take?After comparing the $100,000,000 for the first option and the 101,938.32 for the second option, you should choose:
A. First Option
B. either option, as they are equal
C.second option

Answers

The answer is a. If I’m not mistaken

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