A Car Salesperson Gives You Four Alternative Ways to Pay

Multiple Choice

A car salesperson gives you four alternative ways to pay for your car.The first is to pay $18,000 today.The second is to pay $19,000 one year from today.The third is to pay $20,300 two years from today.The fourth is to pay $21,500 three years from today.If the interest rate is 6 percent,which payment option has the lowest present value and which has the highest?

A) The first is lowest;the second is highest.
B) The second is lowest;the third is highest.
C) The third is lowest;the fourth is highest.
D) The fourth is lowest;the first is highest.