Final answer:
To determine which option to prefer, calculate the future value of each option. The option with the highest future value should be preferred.
Step-by-step explanation:
To determine which option you would prefer to receive, we need to calculate the future value of each option and compare them.
Option a. $95 four years from now:
Future Value = $95 * (1 + 0.12)^4 = $95 * 1.5735 = $149.57
Option b. $57 one year from now:
Future Value = $57 * (1 + 0.12)^1 = $57 * 1.12 = $63.84
Option c. $68 two years from now:
Future Value = $68 * (1 + 0.12)^2 = $68 * 1.2544 = $85.27
Option d. $78 three years from now:
Future Value = $78 * (1 + 0.12)^3 = $78 * 1.4049 = $109.48
Based on the calculations, you would prefer to receive option a, which is $95 four years from now, as it has the highest future value of $149.57.