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Business, 23.05.2020 19:59 ayoismeisalex

(a) For each of the following payment schemes, choose which is better at an interest rate of 5%
i. Receiving $7,000 right now, or $750 per year for 12 years, starting next year.
ii. Receiving $10,000 in 10 years, or receiving $1,000 per year for 5 years, starting now.
(b) For each of the following pairs of options, find the interest rate which would make you indifferent between them.
i. Receiving $1,000 now, or $1,402.55 in five years.
ii. Receiving $166,666.67 now, or $15,000 per year in perpetuity starting next year.

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(a) For each of the following payment schemes, choose which is better at an interest rate of 5%
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