ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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June has a small house, on a small street, in a small town. If she
sells the house now, she will likely get $110, 000 for it. If she
waits one year, she will probably receive more- say, $120,000. If
she sells the house now, she can invest the money in a 1-year
guaranteed growth bond that pays 8% annual interest,
compounded monthly. What are the 2 options worth, and which
should she choose?
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Transcribed Image Text:June has a small house, on a small street, in a small town. If she sells the house now, she will likely get $110, 000 for it. If she waits one year, she will probably receive more- say, $120,000. If she sells the house now, she can invest the money in a 1-year guaranteed growth bond that pays 8% annual interest, compounded monthly. What are the 2 options worth, and which should she choose?
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