# Choosing between assets

A wealthy Uncle has offered to give you either of assets: (a) an asset that pays $500 at the end of three years or (b) an asset that pays $100 at the end of each year for five years. Assume that both assets earn a 7% annual rate of return. Which asset should you choose?

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#### Solution Preview

A wealthy Uncle has offered to give you either of assets: (a) an asset that pays $500 at the end of three years or

(b) an asset that pays $100 at the end of each year for five years. Assume that both assets earn a 7% annual rate of return. Which asset should you choose?

The alternative that provides a higher future ...

#### Solution Summary

Choice between two assets using time value of money are provided.

$2.19