Answer:
I would prefer the 815 dollars one year from today
Explanation:
we will calculate the present value of the 815 dollars one year from today
[tex]\frac{Nominal}{(1 + rate)^{time} } = PV[/tex]
Nominal 815.00
time 1
rate 0.04
[tex]\frac{815}{(1 + 0.04)^{1} } = PV[/tex]
PV 783.65
We now compare: 783.65 - 770 = 13.65
The option of 815 one year from today has a better present value than 770 today.
It would be better to wait a year and receive 815 dollars at the curent interest rate.
