1. Your Aunt Matilda Mae makes you the following offer: $15,000 upon undergraduate graduation in one year or $18,000 upon MBA graduation in 3 years. Which offer should you take if current rates are 14%
A) The $15,000 upon undergraduate graduation in one year
B) The $18,000 upon MBA graduation in 3 years
C) Either offer is a good choice as they have equal values.
2. You have found the perfect burial plot. Of course, you don't plan to need it for 60 years. The plot costs $12,000 today and burial plot prices are increasing at 4% per year. How much do you need to deposit at the beginning of each year to have enough saved to pay for the plot in 60 years, if you can earn 11% on your deposit?
A) $2.52
B) $23.97
C) $26.55
D) $2,103.93