Sharon Has Received an Offer to Purchase Her Bakery

Multiple Choice

Sharon has received an offer to purchase her bakery. The first offer is for $60,000 now along with two payments of $25,000 at the end of each year for two years. The second offer is for $30,000 now, no payment in year 1 and $45,000 in years 2 and three. If interest is calculated at 4.2% compounded monthly, determine whether the first offer is the better alternative, and by how much.

A) Option 1 by $2,500.66
B) Option 1 by $4,099.21
C) Option 2 by $4,099.21
D) Option 2 by $2,500.66
E) Option 2 by $750.25