In answering which of the following questions would you find it necessary to calculate a future value?
A) If Jill puts $5,000 today into a bank account that pays 3 percent interest,then how much will she have in the account after 2 years?
B) Should ABC Corporation buy a factory today for $2 million,knowing that the factory will yield the corporation $3 million after 5 years?
C) As the winner of a lottery,should Michael choose an immediate payment of $250,000 or should he choose annual payments of $30,000 for each of the next 10 years?
D) You would find it necessary to calculate a future value in order to answer all of these questions.
Correct Answer:
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