Which of the following would you prefer?
A) Option Q: $400 to be received in 9 years when rates are 8%
B) Option A: $210 today
C) Option R: $500 to be received in 12 years when rates are 8%
D) Option K: $500 to be received in 12 years when rates are 9%

Question

Quizplus · Accepted Answer

Option A gives a smaller amount but it is received in the present moment. Since the other options offer more money, but are received in the future, they are worth less due to the time value of money. Option B is the best choice because it gives the highest value in the present.

Which of the Following Would You Prefer