Gloria Ammon has just won the state lottery and has the following three payout options for after-tax prize money:
1) $64,000 per year at the end of each of the next six years
2) $304,000 (lump sum) now
3) $502,000 (lump sum) six years from now
The annual discount rate is 9%.Compute the present value of the third option.(Round to nearest whole dollar. )
Present value of $1:
A) $240,000
B) $98,133
C) $101,717
D) $299,192
Correct Answer:
Verified
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