James has just won the lottery after purchasing one $10 lottery ticket. The state offers him the following three payout options for after-tax prize money:
1. $50,000 per year at the end of each of the next six years
2. $300,000 (lump sum)now
3. $400,000 (lump sum)six years from now
Calculate the present value of each scenario using an 8% discount rate. Round to nearest whole dollar.
Present value of annuity of $1: Present value of $1:

Question

James has just won the lottery after purchasing one $10 lottery ticket. The state offers him the following three payout options for after-tax prize money:
1. $50,000 per year at the end of each of the next six years
2. $300,000 (lump sum)now
3. $400,000 (lump sum)six years from now
Calculate the present value of each scenario using an 8% discount rate. Round to nearest whole dollar.
Present value of annuity of $1:  Present value of $1:

Quizplus · Accepted Answer

The Answer of James has just won the lottery after purchasing one $10 lottery ticket. The state offers him the following three payout options for after-tax prize money:
1. $50,000 per year at the end of each of the next six years
2. $300,000 (lump sum)now
3. $400,000 (lump sum)six years from now
Calculate the present value of each scenario using an 8% discount rate. Round to nearest whole dollar.
Present value of annuity of $1:  Present value of $1:

James Has Just Won the Lottery After Purchasing One $10