Compare the economic values of two options given an annual rate of 6.6%. Option 1 - $900 in 90 days and $1,200 in 120 days. Option 2 - $850 in 240 days and $1,390 in 320 days. Given the following information, choose the best option.
A) Option 1 - benefit of $22.35
B) Option 1 - benefit of $68.51
C) No difference between options
D) Option 2 - benefit of $22.35
E) Option 2 - benefit of $68.51

Question

Quizplus · Accepted Answer

The future value of Option 1 is $2,100 and the future value of Option 2 is $2,240. The difference between the two future values is $140. The present value of $140 at 6.6% for 320 days is $68.51.

Compare the Economic Values of Two Options Given an Annual