4.

You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $125,000 today or receive payments of $3000 a month for fifty months. You can earn 12 percent per year on your money. Which option should you take and why?

A.	You should accept the payments because they are worth $128,576 today.

B.	You should accept the payments because they are worth $134,865 today.

C.	You should accept the payments because they are worth $143,820 today.

D.	You should accept the $125,000 because the payments are only worth $117,588 today.

E.	You should accept the $125,000 because the payments are only worth $120,430 today.