You are comparing two investment options that each pay 6 percent interest, compounded annually. both options will provide you with $12,000 of income. option a pays $2,000 the first year followed by two annual payments of $5,000 each. option b pays three annual payments of $4,000 each. which one of the following statements is correct given these two investment options? assume a positive discount rate. both options are of equal value since they both provide $12,000 of income. a) option a has the higher future value at the end of year three. b) option b has a higher present value at time zero. c) option b is a perpetuity. d) option a is an annuity.

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Your parents have accumulated a $170,000 nest egg. they have been planning to use this money to pay college costs to be incurred by you and your sister, courtney. however, courtney has decided to forgo college and start a nail salon. your parents are giving courtney $20,000 to her get started, and they have decided to take year-end vacations costing $8,000 per year for the next four years. use 8 percent as the appropriate interest rate throughout this problem. use appendix a and appendix d for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. how much money will your parents have at the end of four years to you with graduate school, which you will start then?

Which term best fits the sentence? is the process of reasoning, analyzing, and making important decisions. it’s an important skill in making career decisions. a. critical thinking b. weighing pros and cons c. goal setting