Which of the following decisions would involve the use of the future value of $1? Select all that apply.
A) Your brother buys your car and offers to pay you $500 now or $1,500 in two years.
B) You win a lawsuit and are offered a lump-sum payment today of $100,000 or $15,000 a year for 20 years.
C) Your father and mother wish to deposit enough money on the date of your high school graduation to enable you to take a cruise that will cost $7000 when you graduate from college in 4 years.
D) You want to have $1,000,000 in order to retire at age 55, but need to know how much you will need to deposit each year from now until your 55th birthday.

Question

Quizplus · Accepted Answer

A involves comparing the future value of $500 today with $1,500 in two years. C involves calculating how much to deposit now to have $7,000 in four years, which uses the future value concept.

Which of the Following Decisions Would Involve the Use of the Future