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Answer each of the following independent questions. You recently won a lottery and have the option of receiving one of the following three prizes: (1)
Answer each of the following independent questions. You recently won a lottery and have the option of receiving one of the following three prizes: (1) $82,000 cash immediately, (2) $30,000 cash immediately and a six-year annual annuity of $9,000 beginning one year from today, or (3) a six-year annual annuity of $17,000 beginning one year from today. Assuming an interest rate of 7% compounded annually, determine the present value for the above options. Which option should you choose? A
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