Bill Martin made an investment several years ago, and he now has an option as to how it will take the return on that investment. Option 1 is to receive an immediate cash payment of $100,000. Option 2 is to receive a payment of $10,000 per year for the next 10 years and then to receive a final payment of $100,000 in the eleventh year. Option 3 is to receive a payment of $20,000 per year for the next 10 years. Bill desires a rate of return on this investment of at least 8%. Which option will return the most to Bill?© BrainMass Inc. brainmass.com March 22, 2019, 2:37 am ad1c9bdddf
The best return option for an investment made several years ago is worked out in an attached Excel spreadsheet.