To determine which option you should choose, we need to compare the value of $100,000 today with the future value of $290,000 in 11 years. To make a fair comparison, we will calculate the present value (PV) of the $290,000 to be received in 11 years, assuming a 12% annual interest rate.

The formula for the present value (PV) of a future sum is:

$PV = \frac{FV}{(1 + r)^t}$

Where:

• $FV$ is the future value ($290,000)
• $r$ is the interest rate (12% or 0.12)
• $t$ is the time in years (11 years)

Let's calculate this value.The present value (PV) of receiving $290,000 in 11 years at a 12% interest rate is approximately $83,368.07.

Since this present value is less than the $100,000 offered today, you should choose the $100,000 today.

Would you like further details or have any questions?

Here are 5 related questions:

1. What is the future value of the $100,000 if invested for 11 years at 12%?
2. How would changing the interest rate to 10% affect the decision?
3. What is the break-even interest rate for both options to be equal?
4. What is the importance of time value of money in investment decisions?
5. How does compound interest affect long-term investments?

Tip: Always consider the impact of inflation on the real value of money over time.