Problemrichard simons is selling his house he has a choice, Ask an Expert

Accounting

Problem:

Richard Simons is selling his house. He has a choice of taking $125,000 today or $135,000 in 6 months. If he takes the money today, he can invest it at Valley Bank at 5% interest compounded monthly.

Required:

Question 1: How much would the 125,000 be worth in six months if invested?

Question 2: Which offer should he take? Why? How much more money does he gain in making this choice?

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171002

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