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    Inheritance alternative

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    Your uncle has given you three alternatives for your inheritance. You can have $5,000 now; $1,000 per year for the next eight years; or $12,000 at the end of eight years. You assume your opportunity cost or discount rate is 11% interest annually.

    1. Which inheritance alternative would be best? Why?

    2. Would your decision be different if you could earn interest at 13%?

    3. Would your decision be different if you knew the economy was declining and the risk of non-payment eight years from now was risky?

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    https://brainmass.com/economics/bonds/inheritance-alternative-present-future-value-calculations-78959

    Solution Preview

    Your uncle has given you three alternatives for your inheritance. You can have $5,000 now; $1,000 per year for the next eight years; or ...

    Solution Summary

    This provides the steps to calculate and compare the value of inheritance alternatives

    $2.19