Inheritance investment options which is one would be better?

denali9696 · #1 Apr 24, 2008, 04:52 PM

Hello,

Can someone please assist me in the following question.

Your uncle has given you three alternatives for your inheritance. You can have $10,000 now; $2,000 per year for the next eight years; or $24,000 at the end of eight years. Which inheritance alternative would be best and why? The discount rate is 6% (Explain your answer fully)

My choice would be the 24K at the end of 8 years because I would then receive $38,252 vs. the 10K now or the 2k per year which would only be 16k at the end of the eight years.

Please let me know if I am on the right track.



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