Interview Question

Investment Banking Summer Analyst Interview

-Chicago, IL

Bank of America

If someone offered you $1000 today or paid out at $100 a month over the next ten months, which would you take?

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Interview Answers

5 Answers


The answer should be the $1000...$1000 today is worth more than $1000 ten months from now or $100 every month for 10 months due to the time value of money.

Anonymous on


Money loses value over time...

Anonymous on


I think it depends largely on the market. 1000 dollars a couple years ago if put into the right fund would be nice now. With how long the market has been expanding It would be a tough choice now. Additionally, they might be checking personality on this. Do you want your money now, or do you like something steady even if the value depreciates over time?

Anonymous on


Fast track

Anonymous on


The quantitative way to answer this is the perpetuity growth formula. You would take the monthly payments. Don't really know why, that is what the interviewer told me.

Anonymous on

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