Can someone please help

the first option

Step-by-step explanation:

Frank should have used 1.2 not 0.2 in the equation .

because its like the future value formula is FV=PV(1+i)n, where the present value PV increases for each period into the future by a factor of 1 + i. 

So, why do we add 1 to i?

When we look at most alternative rates of return, they are almost universally less than 100%. It is very difficult to make 100% on an investment over long periods of time. You would REALLY have to know what you are doing. Typically, most “alternative” rates of investment will be under 10%. So, that means that when you multiply a number that is less than 1 by itself repeatedly, it gets smaller and smaller quite rapidly.

Let’s look at what happens when we use a return of 0.06 or 6%.

For just two time periods, 0.06 * 0.06 would produce 0.0036! This is a number which is VERY much smaller, by over an order of magnitude! It is not very helpful to our cause.

Adding 1 to the alternate rate of return stabilizes the number.

1.06 * 1.06 = 1.0036 No matter how many times you perform the multiplication, (for a larger number of time periods), you thus still have a number that is “close” to 1. We then later use this as a divisor, so, the numerator is nearly, but not quite, unchanged. The tiny, leftover fractional part gives us the ability to differentiate between various investments, while keeping things on an even keel.

no he doesnt because "-16' is negatiive

step-by-step explanation: