You have the choice of receiving $15,000 today or $25,000 in six years as a down payment from someone who wants to purchase your rental property. if you could expect to earn 11 percent on invested money (i. e. your time value of money = 11%), which would you choose? i would choose $15,000 today i would choose $25,000 in six years i would choose neither

I would choose $15,000 today

Explanation:

Future value= $15,000

rate of interest= 11%

umber of years=  6 years

we know that

FV_n = future value of present investment

PV= Present value of investment

r= interest rate

n = number of years.

= $28,056.22

So, If i receive $25,000 ,after six years i would lose (28,056.22-25,000)= $3056.22 . therefore i would take $15,000 today.

contributions made after 1986. after-tax contributions to employer plans made after 1986 are recovered pro rata with taxable amounts. the remaining $80,000 is from pre-tax contributions, employer matching dollars, and earnings on those amounts.

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