Value of a single amount versus a mixed stream Personal finance problem Gina Vitale has...
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Value of a single amount versus a mixed stream Personal finance problem Gina Vitale has just contracted to sell a small parcel of land that she inherited a few years ago. The buyer is willing to pay $24,811 now, or the buyer will make a series of payments starting now and continuing at annual intervals shown in the following table, Because Gina doesn't really need the money today, she plans to let it accumulate in an account that earns 6% annual interest. Given her desire to buy a house five years after selling the lot, she decides to choose the payment alternative either the lump sum or the mixed streamthat provides the higher future value at the end of 5 years. Which alternative will she choose? The future value, FV,, of the lump sum deposit is $ 33,202.71'. (Round to the nearest cent.) The future value of the mixed stream of payments is S 57809.04. (Round to the nearest cent.) Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Mixed Stream Beginning of year Cash Flow 0 $4,000 1 $5,000 2 $8,000 3 $10,000 4 $4,000
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