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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Problem 9-12AÂ Comparison of Alternatives
Darlene Page’s grandparents want to give her some money when she graduates from high school. They have offered Darlene the following three choices:
a.     Receive $16,000 immediately. Assume that interest is compounded annually.
b.     Receive $2,400 at the end of each six months for four years. Darlene will receive the first check in six months.
c.      Receive $4,640 at the end of each year for four years. Assume that interest is compounded annually.
Required
Darlene wants to have money for a new car when she graduates from college in four years. Assuming an interest rate of 8%, what option should she choose to have the most money in four years?
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