document.write( "Question 1160256: Jason has a problem. As a graduation gift, his father offered him either an ₱80,000 cash today or an investment that will give him ₱100,000 two years in the future. Assuming a prevailing interest rate of 12%, which option should Jason choose to maximize the money he can receive?\r
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Algebra.Com's Answer #783523 by Theo(13342)\"\" \"About 
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he can get 80,000 today or 100,000 two years from now.
\n" ); document.write( "the prevailing interest rate he can earn on the money he receives today is 12% per year.
\n" ); document.write( "the formula to use is f = p * (1 + r) ^ n
\n" ); document.write( "f is the future value
\n" ); document.write( "p is the present value
\n" ); document.write( "r is the interest rate per time period
\n" ); document.write( "n is the number of time periods.
\n" ); document.write( "use this formula to see how much he would have in two years if he took the 80,000 today.
\n" ); document.write( "the formula becomes f = 80,000 * (1 + .12) ^ 2 = 100,352.
\n" ); document.write( "he should take the 80,000 today and invest it at 12%.
\n" ); document.write( "he'll have more than 100,000 in two years, but not by much.
\n" ); document.write( "still, it's more, so that's the way to go.
\n" ); document.write( "if the money he invests today is invested at 12% compounded monthly, then he'll have even more.
\n" ); document.write( "with monthly compounding, the formula becomes f = 80,000 * (1 + .12/12) ^ (2 * 12) = 101,578.7719.
\n" ); document.write( "that makes taking the 80,000 today and investing it at 12% more compelling.\r
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