# Assuming you could earn 11 percent annually, which alternative should you choose?

Your rich godfather has offered you a choice of one of the three following alternatives: $10, 000 now; $2,000 a year for eight years: or $24,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually, would you still choose the same alternative?

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To solve the question you will need to calculate the interest earned on each choice. I will use just simple (once ...

#### Solution Summary

Reasoning is given. Four sentence response.

$2.19