Which amount is worth more to you: $8000 three years from now, $12000 eight year

Question

Which amount is worth more to you: $8000 three years from now, $12000 eight years from now, or $15000 twelve years from now?  Assume that you can invest your money at 9 percent annual rate.

Explanation / Answer

x.0mtyle="width: 576pt; border-collapse: collapse" cellspacing="0" cellpadding="0" width="768" border="0" x:str> Response details: PV = FV/(1+r)n PV = Present Value FV = Future Value r = Investing rate Value after 3 years = $ 8000 FV = $8000 PVCF 3years 9% = 2.53129 PV = 8000/2.53129       =3160.44 3years profit= 8000 - 3160.44                       = 4839.55 1 year profit = 4839.55/2.53129                       = $1911.89 Value after 8 years = $12000 FV = $12000 PVCF 8years 9% = 5.53482 PV = 12000/5.53482       = 2168.019 D

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