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You Have Invested $50,000 in the Start-Up of Your Friend's

Question 86

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You have invested $50,000 in the start-up of your friend's biotech business.He has offered you the following three repayment options.Interest rates are currently at 8%.Which one do you prefer? Support your answer.Are there any other factors you would like to consider?
A) A $75,000 lump sum payment in 5 years.B) 10 years of monthly payments of $725.
C) Monthly payments of $500 for 20 years and a final single payment of your full $50,000.

Correct Answer:

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A) 75,000/(1.08)5 = 51,044
B)...

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