Marilyn’s parents have agreed to help her purchase a new car upon graduation in four years. They have given her two choices. The first choice is that they will give her $4,180 each year for the next four years for her to invest herself. The second choice is that they will wait four years and give her $18,540. Marilyn can invest the money at a 3% rate.
Which option should Marilyn choose? (Round present value factor calculations to 4 decimal places, e.g. 1.2512 and final answers to 0 decimal places e.g. 58,971.)
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Option 1 |
Option 2 |
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Present value |
$ |
$ |
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Marilyn should take |
