(b) Assuming an annual discount rate of 10 percent, give the present value of th

(b) Assuming an annual discount rate of 10 percent, give the present value of the maturity: PV(lump sum) = $100(table 2, i=.05, n=16) = $45,811 (rounded) (c) Assuming an annual discount rate of 10 percent, give the present value of the interest payments: PV(annuity) = $4(table 4, i=.05, n=16) = $43,351 (d) The mathematics aside, which option would you really prefer? The interest or the maturity? Can you reconcile your real preference with the mathematics?

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