Comparison of Alternatives

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

1. Receive $98,500 at the beginning of the current year
2. Receive $104,410 at the end of the year
3. Receive $20,020 at the end of each year for eight years
4. Receive $9,610 at the end of each year for 30 years

Jane can invest her winnings at an interest rate of 6% compounded annually at a major bank.

Use the appropriate present or future value table:

FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1

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

	Present Value
Option 1	$fill in the blank 1
Option 2	$fill in the blank 2
Option 3	$fill in the blank 3
Option 4	$fill in the blank 4

Which of the payment options should Jane choose?