Comparison of Alternatives

Jane Bauer has won the lottery and has the following four options for receiving her winnings:

1. Receive $96,500 at the beginning of the current year
2. Receive $104,220 at the end of the year
3. Receive $19,950 at the end of each year for eight years
4. Receive $9,810 at the end of each year for 30 years

Jane can invest her winnings at an interest rate of 8% compounded annually at a major bank.

Calculate the Present value for each of the above options. Round all answers to the nearest dollar.

Present Value Option 1 96,500 Option 2 A 96,500 Option 3 $ 114,605 X Option 4 Which of the payment options should Jane choose