Decision to choose the asset based on annual rate of return


A wealthy uncle has offered to give you either of two assets: (a) an asset that pays $500 at the end of three years or (b) an asset that pays $100 at the end of each year for five years. Assume that both assets earn a 7% annual rate of return. Which asset should you choose?

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Finance Basics: Decision to choose the asset based on annual rate of return
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