Assume Money Can Earn 15% Compounded Semi-Annually

question 140

Multiple Choice

Assume money can earn 15% compounded semi-annually. Rank the following payments in order of the payee's first choice, second choice, and third choice, respectively: 10,000 paid today, $20,000 to be paid five years from today, or $13,500,000 to be paid fifty years from today.

• A) $10,000; $20,000; $13,500,000
• B) $10,000; $13,500,000; $20,000
• C) $13,500,000; $10,000; $20,000
• D) $13,500,000; $20,000; $10,000
• E) $20,000; $13,500,000; $10,000

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