Originally Posted by lawleypop

All else being equal, present money > future money.

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What is this based on? Economcy thingies? I was just assuming the future money was garunteed.. its not like I would know what to do with a million dollars at the present anyways, and I'm financially secure at the moment, so B seems more useful to me?

Time Value of Money.

If you don't know what to do with it, invest it.

If anything, if you don't need it now, that's even more reason to take it now and invest it now and probably come out with more than 2mil at the end of 8 years.

Not having something is generally not more useful than having it, unless you're comparing having AIDS when you're 20 and having AIDS when you're 105.

And I don't know you mean by guaranteed. They're both guaranteed in the question. Have it now, or have it later. Nothing about that says you may or may not have it now or later.

And it seems as though you're assuming you won't be financially secure in 8 years, or that you would finally know what to do with not only a million dollars, but 2 million now. What's the difference? If you think you'll need it in 8 years, then take the mil now and again, probably come out with more than 2mil.



Edit: Honestly, not that I'm an expert because these have always been my lowest marks, but this is the jist of it. Take it nao.

And yes, I'm assuming you can make on average, over 100,000 in returns/year. But I don't think that's unreasonable.

a), i wouldn't trust b)

b, duh? assuming inflation is incorporated

Originally Posted by ReDorkulateD

a), i wouldn't trust b)

The money is guaranteed, your point is irrelevant.

Originally Posted by Rakim

Option A: 1) Receive a million dollars in a weeks time

Option B: 2) Receive two million dollars after 8 years.

Which and why?

I would take option A) then I would buy a new 500 grands house (real estate) in GTA, which in return will make me 2 millions in 8 years!! SWEET
Edit: Changed milli to grants

Originally Posted by mcmastergcdb

I would take option A) then I would buy a new 500 milli dolloar house (real estate) in GTA, which in return will make me 2 millions in 8 years!! SWEET

Where the hell did 500 million dollars come from?


And yeah, I know what you mean by the interest thing, Cheri, its just I don't know how much you could make in interest in 8 years...

@whoever raised the point about the 2 mill having being adjusted with interest...um, you only get 2 mill, not 2 mill adjusted, otherwise B would make more sense.


The entire thing is a common psychology question having to do with people being impulsive. I was in a psych lab and they offered this exact same choice, only with 10 and 20$ (delayed).

Originally Posted by RyanC

Where the hell did 500 million dollars come from?


And yeah, I know what you mean by the interest thing, Cheri, its just I don't know how much you could make in interest in 8 years...

@whoever raised the point about the 2 mill having being adjusted with interest...um, you only get 2 mill, not 2 mill adjusted, otherwise B would make more sense.


The entire thing is a common psychology question having to do with people being impulsive. I was in a psych lab and they offered this exact same choice, only with 10 and 20$ (delayed).

lol i meant to say grants! also the if you invest in bank, the interest is barely 1% per year. so it would take u 100yrs to double the money. Unless you good wid the share market!

Originally Posted by mcmastergcdb

I would take option A) then I would buy a new 500 grands house (real estate) in GTA, which in return will make me 2 millions in 8 years!! SWEET
Edit: Chanhed milli to grands

Investing in the housing market would be a be mistake. ROI, is unpredictable and the OC of investing in the housing market over say placing the money in an interest bearing account/purchasing government bonds would suggest you do the the latter.

option a

You could use the money to buy property and houses and sell them off in 8 years for much more than what you paid. You might as well buy into the US housing market now while things are dirt cheap and reap the rewards when the economy gets better.

Originally Posted by healthsci1

Investing in the housing market would be a be mistake. ROI, is unpredictable and the OC of investing in the housing market over say placing the money in an interest bearing account/purchasing government bonds would suggest you do the the latter.

Real estate is the only thing that you would never lose in! Due to recession, th property price had come down a bit, but it really hit the US more than Canada. It might be a bit unpredictable, due to the immigrants and increase in population, the net property cost has increased over the years buddy!

Is it possible to make $1 million through bank interest in 8 years by investing $1 million? (I don't know much about this kind of stuff)
If so, I'd choose option A.

If not, I'd choose option B.

Originally Posted by Kathy2

Is it possible to make $1 million through bank interest in 8 years by investing $1 million? (I don't know much about this kind of stuff)
If so, I'd choose option A.

If not, I'd choose option B.

You wouldn't make $1 million inbank interest in that 8 years, but if you invested it wisely it definitely would be possible to make another $1 million in 8 years.

Originally Posted by Kathy2

Is it possible to make $1 million through bank interest in 8 years by investing $1 million? (I don't know much about this kind of stuff)
If so, I'd choose option A.

If not, I'd choose option B.

Bank interest wouldn't make $1M in 8 years unless you add in some sort of outside investment.

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