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Caroline Weslin needs to decide whether to accept a bonus of $1,820 today or wait two...

Caroline Weslin needs to decide whether to accept a bonus of $1,820 today or wait two years and receive $2,100 then. She can invest at 6 percent. What should she do?

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Answer #1

Present Value of $2100 after 2 year= Future Value/(1+interest rate)^year=2100/(1+6%)^2=$1868.99

As the Present Value of $2100 after 2 year is more than $1820, she should wait for 2 more year and receive $2100

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