As an excellent student in environmental ecology you have been awarded the "Clean Effluent Prize" by state agency. You (or your estate) are to receive $300 forever from the state or the agency will allow you to choose $400 over the next 25 years. Payments are to be received semi-annually and if the market rate of interest is 6% what is the value of the two options respectively?
A) $30,000; $10,000.25
B) $5,000; $5,145.95
C) $10,000; $6,304.74
D) $2,500; $3,859.46
E) $6,666.67; $5,113.34

Question

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The Answer of As an excellent student in environmental ecology you have been awarded the "Clean Effluent Prize" by state agency. You (or your estate) are to receive $300 forever from the state or the agency will allow you to choose $400 over the next 25 years. Payments are to be received semi-annually and if the market rate of interest is 6% what is the value of the two options respectively?
A) $30,000; $10,000.25
B) $5,000; $5,145.95
C) $10,000; $6,304.74
D) $2,500; $3,859.46
E) $6,666.67; $5,113.34

As an Excellent Student in Environmental Ecology You Have Been