Your grandmother has told you she can either give you $4,500 now or $5,200 when...
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Accounting
Your grandmother has told you she can either give you $4,500 now or $5,200 when you graduate from college in three years. Your savings account earns 4% interest, compounded annually. Which option would be worth more to you now, and how much more? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables. Round your final answer to 2 decimal places.)
Choose the correct answer:
A- The $5,200 in the future is worth $100.00 more than the $4,500 now.
B- The $4,500 now is worth $100.00 more than the $5,200 in the future.
C- The $4,500 now is worth $122.80 more than the $5,200 in the future.
D- The $5,200 in the future is worth $122.80 more than the $4,500 now.
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