SOLUTION: From a financial point of view, which is the best choice: to receive $10,000 now, or a note that promises $15,000 five years from now? Five year interest rates are 8%

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Question 947577: From a financial point of view, which is the best choice: to receive $10,000 now, or a note that promises $15,000 five years from now? Five year interest rates are 8%
Answer by Theo(13342) About Me  (Show Source):
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you can get $10,000 now and invest it at 8% or you can get $15,000 five years from now.

the future value of 10,000 for five years at 8% compounded yearly is equal to 10000 * 1.08)^5 which is equal to 14693.28077.

at the end of the 5 years, you will have more money if you wait 5 years to get the 15,000, rather than taking the $10,000 now and investing it at 8% for the next five years.