Submit Qui Quiz: Chapter 3 Quiz 14 of 20 This Quiz: 20 pts possib This Question:
ID: 2821845 • Letter: S
Question
Submit Qui Quiz: Chapter 3 Quiz 14 of 20 This Quiz: 20 pts possib This Question: 1 pt Your mom is thinking of retiring. Her retirement plan will pay her either $225,000 immediately on retirement or $315,000 five years after the date of her retirement. Which alternative should she choose if the interest rate is: a. 0% per year? b. 8% per year? c, 20% per year? a, 096 per year? Round if the interest rate is 0% per year, the PVOf the amount to be received five years after retirement is S to the nearest dollar.) Which altermative should your mom take in this case? (Select the best choice below.) O A. Take the money now O B. Wait until 5 years after retirement. b, 8% per year? lf the interest rate is 8%, the PV of the amount to be received five years after retirement is nearest dollar.) Which alternative should your mom take in this case? (Select the best choice below) for O A. Take the money now. c.20% per year? Ifthe interest rate is 20% the PV of the amount to be received five years after retirement is S O B. Wait until 5 years after retirement. Round to the nearest dollar.) Which alternative should your mom take in this case? (Select the best choice below.) O A. Take the money now O B. Wait until 5 years after retirement. to regist Click to select your answer(s) Save for Later 6:23 PM 9/23/2018 PrtScn Home End PgUp PgDn Ins Del F10Explanation / Answer
a). PV = 315,000
Using Excel =PV(0%,5,0,-315000)
Wait until 5 years after retirement
b). PV = 214,383.71
Using Excel =PV(8%,5,0,-315000)
Take the money now.
c). PV= 126,591.44
Using Excel =PV(20%,5,0,315000)
Take the money now.