Is it better to take $1000 today or $1300 a year from now? (A Time Value of Money Question)?

Question

Is it better to take $1000 today or $1300 a year from now? Why? If you choose $1000 today, how much would it take for you to wait a year?

Answer 1

If you take 1000 today and invest it at 10%, you will have 1000*1.1=1100 in a year.

If you could invest it at 30%, you would have 1300 in a year.

But most likely, you can not find a 30% investment.

So, you are better off with 1300 in a year. If you can earn 10%, then the 1300 is worth 1300/1.1 = 1182 now.

You would need an investment greater than 30% in order to take the 1000 now.

Answer 2

see the 1300 in a year from now sounds like a great deal, becuase you make 30% on it

but if you owe money, like most Americans do, that might be a nice chunck of change to put down on you debt, and you might be paying like 22% on the credit card, now you are saying where is the other 8 % coming from, it is worth $80 to me to live cleaner

and also if I am not paying off my credit cards because I have no payments I can start to save what ever my payment is,

so in the end you lose a little but, but you might be able to sleep better at night and raise your credit score

but it comes down to need, if you dont need it take it next year, but you might have to chase some one for it, and that sucks

Answer 3

If you waited and got 1300 a year from now you'd be making about 30% on your money. That's good.

Answer 4

1300 in a year.

i dont need the 1k today and interest rates are not at 30% so i'd take the 30% bonus in a year.

Answer 5

take a 1000 dollars today, if can invest it or you could buy something with the $1000 and sell it to make a profit and carry on doing it till next year. by next year you could have made your self another $2000, try it, you wont be sorry.