Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Consider the following situation: Suppose you are given the option between receiving a $100 tax-free payment now (mailed to your address today) or a larger tax-free payment mailed to your address twelve (12) months from now
Consider the following situation:
Suppose you are given the option between receiving a $100 tax-free payment now (mailed to your address today) or a larger tax-free payment mailed to your address twelve (12) months from now. The payment mailed twelve months from now is higher to compensate you for waiting. You can only receive one of the two payment options, which are guaranteed.
Question
What is the minimum amount of money that you would accept 12 months from now instead of getting a $100 check today?
Here are the options from which you should choose one amount:
$102, $104, $106, $108, $110, $112, $114, $116, $118, $120, $130, $140, $150, $160, more than $160
Expert Solution
The minimum amount I would accept a year from now is $110. If I'm going to wait a year, I need to receive a return of at least 10% for it to be worth the delay. That would offset the uncertainty and make it feel like a decent investment.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
