Suppose you win a small lottery and you are given the following choice: You can receive (1)an immediate payment of $10,000 or (2)two annual payments,each in the amount of $5,200,with the first payment coming one year from now,and the second payment coming two years from now.You would choose to take the immediate payment of $10,000 if the interest rate is
A)2 percent,but not if the interest rate is 1 percent.
B)3 percent,but not if the interest rate is 2 percent.
C)4 percent,but not if the interest rate is 3 percent.
D)5 percent,but not if the interest rate is 4 percent.

Question

Quizplus · Accepted Answer

The Answer of Suppose you win a small lottery and you are given the following choice: You can receive (1)an immediate payment of $10,000 or (2)two annual payments,each in the amount of $5,200,with the first payment coming one year from now,and the second payment coming two years from now.You would choose to take the immediate payment of $10,000 if the interest rate is
A)2 percent,but not if the interest rate is 1 percent.
B)3 percent,but not if the interest rate is 2 percent.
C)4 percent,but not if the interest rate is 3 percent.
D)5 percent,but not if the interest rate is 4 percent.

Suppose You Win a Small Lottery and You Are Given