1. 1.Your grandfather has offered you a choice of one of the three following alternatives: $10,788.42 now; $280 a month for the next seven years; or $20,000 at the end of seven years. Assuming you could earn 9 percent annually, which alternative should you choose?

(Hint: 1. compare three options based on the same dollar value. 2. This calculation is similar to the lottery problems that we covered).

Option 1:

Option 2:

Option 3:

Which alternative would you choose?