Charles has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $125,000 cash payment today. The second option is to receive $21,600 at the end of each of the next 19 years and a $28,100 lump sum payment in the 20th year. Charles can invest money at a 10% rate.

Calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)

Present value Option1 Option 2

Which option should Charles choose to receive his winnings?

If Charles could invest money at 13%, calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)

Present value Option 1 Option 2

Which option should he choose?