8. As the beneficiary of a life insurance policy, you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. If you can earn 6 percent on your money, which option should you take and why?

1. What is the value today of 20 annual payments of $50 received at the end of the year if the discount rate is 5%?

1. You just won the lottery! You will receive a payment of $10,000 at the end of year forever. What is the value of the prize today if the discount rate is 6%?