Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment one year from today). Of the following, which is the highest annual interest rate at which you would prefer the four annual payments over the lump-sum payment?
A)2%
B)5%
C)7%
D)10%

Question

​Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment one year from today). Of the following, which is the highest annual interest rate at which you would prefer the four annual payments over the lump-sum payment?
A)2%
B)​5%
C)​7%
D)​10%

Quizplus · Accepted Answer

The Answer of ​Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment one year from today). Of the following, which is the highest annual interest rate at which you would prefer the four annual payments over the lump-sum payment?
A)2%
B)​5%
C)​7%
D)​10%

​Suppose You Have a Choice Between Receiving a Lump-Sum Payment

Suppose You Have a Choice Between Receiving a Lump-Sum Payment