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The interest rate is 4 percent prove to yourself that it

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Reference no: EM13571283

You have won a contest and now must decide which prize you want. With Prize A, you receive $5,000 today and another $5,500 in one year. Prize B gives you $1,000 today and another $10,000 in one year. The interest rate is 4 percent. Prove to yourself that it does not matter the point in lime at which you compare the prizes" cash flows: the better prize has both the bigger present value and future value.

Reference no: EM13571283

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