Amanda Is Considering One of Two Options

question 123

Multiple Choice

Amanda is considering one of two options. The first option is to receive $48,000 now. The second option is to receive $75,000 at the end of the fifth year. Determine which option should be chosen to maximize benefits now given an interest rate of 8.8% compounded annually.

• A) Second option, as it provides benefit of $54,194.53 compared to $48,000 for second
• B) Second option, as it provides benefit of $53,194.53 compared to $48,000 for second
• C) Second option, as it provides benefit of $52,194.53 compared to $48,000 for second
• D) Second option, as it provides benefit of $51,194.53 compared to $48,000 for second
• E) Second option, as it provides benefit of $49,194.53 compared to $48,000 for second

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Definitions:

Stepmothers

Women who are married to one's parent after a divorce or death of the other parent, but who are not the biological mother of the child.

Stepfamily Cycle

The series of stages that a stepfamily goes through as they integrate and adjust to new family dynamics and relationships.

Chaos

A state of extreme confusion and disorder, often referring to unpredictable and complex systems.

Confusion

A state of being bewildered or unclear in one’s mind about something.