Your grandfather has offered you a choice of one of the three alternatives:1. Take Rs. 500,000 now2. Take Rs 100,000 a year for eight years, or3. Take Rs 1200,000 at the end of eight years.Required:1. Assume you could earn 11% per annum, which alternative should you choose?2. If you could earn 12% per annum, would you still choose the same alternative?

present value =future value1+rn r=rate of interest n=number of years

Answered: Your grandfather has offered you a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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