Suppose an Investor Has the Opportunity to Make an Investment

Multiple Choice

Suppose an investor has the opportunity to make an investment that promises to pay her $100,000 5 years from now. How much should this investor be willing to pay today for this investment opportunity if he could otherwise invest his money in an interest bearing account that yields 5% (annual) and compounds interest on a monthly basis?

A) $77,920.54
B) $78,352.62
C) $97,942.46
D) $432,947.67