Zelda won the jackpot on a penny slot machine in Las Vegas and is given the following three options to receive her jackpot:
Option 1: $100 000 to be received right away,with four additional payments of $100 000 to be received each year for the next four years.
Option 2: $250 000 to be received right away with two additional payments of $100 000 to be received each year for the next two years.
Option 3: $400 000 to be received right away.
Which option should Zelda choose if the interest rate is 8%? Would she choose the same option if the interest rate were 10%? Why?

Question

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The Answer of Zelda won the jackpot on a penny slot machine in Las Vegas and is given the following three options to receive her jackpot:
Option 1: $100 000 to be received right away,with four additional payments of $100 000 to be received each year for the next four years.
Option 2: $250 000 to be received right away with two additional payments of $100 000 to be received each year for the next two years.
Option 3: $400 000 to be received right away.
Which option should Zelda choose if the interest rate is 8%? Would she choose the same option if the interest rate were 10%? Why?

Zelda Won the Jackpot on a Penny Slot Machine in Las