If you require a 9% return on your investments, which would you perfer?

Question

A. 5,000.00 today

B. 15,000.00 in five years

C. 1,000.00 per year for 15 years

Answer 1

Cash is king .I would take the cash today .

Answer 2

$5,000 today is $5,000 right now.

$15,000 in five years is about the same as $9,750 right now.

$1,000 per year for 15 years is about the same as $8,061 right now.  ($7395 if I have to wait a year for the first payment.)

So I would prefer pick B, if I could afford to wait that long.  If my age is 105, then I would take the $5000 today.

Answer 3

5,000.00 today and re-invest it. compound interest.

Answer 4

$5,000 invested at 9 percent for 5 years would be $7,693.12

$5,000 invested at 9 percent for 15 years would be   $18,212.41

If you collected $1,000 annually and invested those payments for 15 years at 9 percent you would end up with $32,003.40

Answer 5

where are you going to get a 9% return.   6 percent would be sensation today.

Answer 6

Is this a trick question?  15,000 in 5 years is much, much better than 9% versus 5,000 today or 1,000 annually for 15 years. Heck, it is almost exactly 25% return compared to 5,000 today.