How do I set this problem up to do it? I do not want the answer just the formula. The question is for Present Value, Future Value, and Annuity Due:

. Your uncle offers you a choice of $30,000 in 50 years or $95 today. If money is discounted at 12 percent, which should you choose? I just need to know what formula to use.

I have alraedy been here and they did not help out at all.

To determine whether you should choose $30,000 in 50 years or $95 today, you can use the concept of present value. The present value formula allows us to compare the value of money received at different times by discounting them to their current worth.

To set up the problem, we need to calculate the present value of both options using the discount rate of 12 percent.

Option 1: $30,000 in 50 years
To calculate the present value of $30,000 in 50 years, we can use the formula for present value of a single future cash flow:

PV = FV / (1 + r)^n

Where:
PV = Present Value
FV = Future Value
r = Discount rate
n = Number of years

Using the formula, we can plug in the values:
PV1 = $30,000 / (1 + 0.12)^50

Option 2: $95 today
Since $95 is being received today, there is no need to discount it. The present value of $95 today is simply $95.

Now that you have the formulas set up, you can calculate the present values for each option.