Congratulations! You have won a state lottery. The state lottery offers you the following (after-tax) payout options

Assuming you can earn 10% on your funds, which option would you prefer?

Present value of the payout, Option #1:

Present value of the payout, Option #2:

Present value of the payout, Option #3:

Thehighest present value using the 8% discount rate and the option that, therefore, appears to be the most favorable, is payout option #

Data Table - X Option #1: $14,000,000 after five years Option #2: $2,300,000 per year for five years Option #3: $12,000,000 after three years Print Done Reference Present Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.9090.893 0.877 0.870 0.862 0.847 0.833 Period 2 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.718 0.694 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 Period 7 0.933 0.871 0.813 0.7600.711 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.4040.351 0.327 0.305 0.266 0.233 Period 9 0.914 0.837 0.766 0.703 0.6450.592 0.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 Period 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 Period 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 Period 17 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.1980.146 0.108 0.093 0.080 0.060 0.045 Period 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 Period 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.116 0.083 0.070 0.060 0.043 0.031 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 Period 21 0.811 0.660 0.538 0.439 0.359 0.2940.242 0.199 0.164 0.135 0.093 0.064 0.053 0.044 0.031 0.022 Period 22 0.803 0.647 0.522 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.083 0.056 0.046 0.038 0.026 0.018 Period 23 0.795 0.634 0.507 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.074 0.049 0.040 0.033 0.022 0.015 Period 24 0.788 0.622 0.492 0.390 0.310 0.247 0.197 0.158 0.126 0.1020.066 0.043 0.035 0.028 0.019 0.013 Period 25 0.780 0.610 0.478 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.059 0.038 0.030 0.024 0.016 0.010 Period 26 0.772 0.598 0.464 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.053 0.033 0.026 0.021 0.014 0.009 Period 27 0.764 0.586 0.450 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.047 0.029 0.023 0.018 | 0.0110.007 Period 28 0.757 0.574 0.437 0.333 0.255 0.196 0.150 0.116 0.090 0.069 0.042 0.026 0.020 0.0160.010 0.006 Period 29 0.7490.563 0.424 0.321 0.243 0.185 0.141 0.107 0.082 0.063 0.037 0.022 0.017 0.014 0.008 0.005 Period 30 0.742 0.5520.412 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.033 0.020 0.015 0.0120.007 0.004 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.0110.005 0.0040.003 0.001 0.001 Period 50 0.608 0.372 0.228 0.141 0.087 0.054 0.034 0.021 0.013 0.009 0.003 0.001 0.001 0.001 Print Done 0 Reference . 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 1.126 1.149 1.172 1.195 1.219 1.062 1.072 1.083 1.094 1.105 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Period 20 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 Period 30 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1.319 1.346 Future Value of $1 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 1.030 1.040 1.050 1.060 1.070 1.080 1.090 1.100 1.120 1.140 1.150 1.061 1.0821.103 1.124 1.145 1.166 1.1881.210 1.254 1.300 1.323 1.093 1.125 1.158 1.191 1.225 1.260 1.295 1.331 1.405 1.482 1.521 1.126 1.170 | 1.216 1.262 1.311 1.360 14121.464 1.574 1.689 1.749 1.159 1.217 1.276 | 1.338 1.403 1.469 1.539 1.611 1.762 1.925 2.011 1.1941.265 1.340 1.419 1.501 1.587 1.677 1.772 1.9742.195 2313 1.230 1.316 1.407 1.504 1.606 1.714 1.828 1.949 2.211 2502 2.660 1.267 1.369 1.477 1.594 1.718 1.851 1.993 2.144 2.476 2.853 3.059 1.305 1.423 1.551 1.689 1.838 1.999 2172 2.358 2.773 3.252 3.518 1.344 1.480 1.629 1.791 1.967 2.159 2.367 2.594 3.106 3.707 4.046 1.384 1.539 1.710 1.898 2.105 2.332 2580 2.853 3.479 4.226 4652 1.426 1.601 1.796 2012 2.252 2518 2.813 3.138 3.896 4.818 5.350 1.469 1.665 1.886 2.133 | 2410 2.720 3.066 3.452 4.363 5.492 6.153 1.513 1.732 1.980 2261 2.579 2.937 3.342 3.798 4.887 6.2617.076 1.558 1.801 2.079 2.3972.759 3.172 3.642 4.177 5.474 7.1388.137 1.605 1.873 2.183 2.540 2.952 3.426 3.970 4.595 6.130 8.1379.358 1.653 1.948 2.292 2.693 3.159 3.700 4.3285.054 6.866 9.276 10.76 1.702 2.026 2407 2.854 3.380 3.996 4.717 5.560 7.690 10.58 12.38 1.754 2. 107 2.527 3.026 3.617 4.316 5.142 6.116 8.613 12.06 14.23 1.806 2.191 2.653 3.2073.870 4.661 5.6046.727 9.646 13.74 16.37 1.860 2279 2.786 3.400 4.1415.034 6.1097.400 10.80 15.67 18.82 1.916 2.370 2.925 3.604 4.430 5.437 6.6598.140 12.10 17.86 21.64 1.9742.465 3.072 3.820 4.741 5.871 | 7.258 8.954 13.55 20.36 24.89 2.033 2.563 3.225 4.049 5.0726.341 7.911 9.850 15.18 23.21 28.63 2.094 2.666 3.386 4.2925.427 6.848 8.623 10.83 17.00 26.46 32.92 2.157 2.772 3.556 4.549 5.8077.396 9.399 11.92 19.04 30.1737.86 2.221 2.883 3.733 4.822 6.214 7.988 10.25 13.11 21.32 34.3943.54 2.288 2.999 3.920 5.112 6.649 8.627 11.17 14.42 23.88 39.20 50.07 2.357 3.119 4.116 5.418 7.114 9.317 12.17 15.86 26.75 44.69 57.58 2427 1 3 2431 4322 15 743 7612 | 10 06 13 27 17 45 29 96 50 95 1 66 21 1.373 1.400 1.428 1.457 1.486 1.173 1.184 1.196 1.208 1.220 1.232 1.245 1.257 1.270 1.282 1.516 1.546 1.577 1.608 1.641 1.295 1.308 1.321 1.335 1.348 1.673 1.707 1.741 1.776 1 811 Print Done Reference 12% Present Value of Ordinary Annuity of 51 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 | 1.808 1.783 1.759 1.736 1.6901.647 1.626 1.605 1.566 1.528 Period 3 2.9412.884 2.829 2.775 2.723 2.673 2624 2.577 2.531 2.487 2.4022.322 2.283 2.246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.855 2.798 2.690 2.589 Period 5 4.853 4.713 4.580 4.452 4.329 4212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.4864.355 4.111 3.889 3.784 3.685 3.498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.160 4.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 | 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 4.344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.9955.759 5.328 4.946 4.772 4.607 4.303 4.031 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 7.0246.710 6.418 6.145 5.6505.216 5.019 4.833 4.494 4.192 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 | 5.234 5.029 4.656 4.327 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7943 7.536 7.1616.814 6.194 5.660 5.421 5.197 4.793 4.439 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7487 7.103 6.424 5.8425.583 5.342 4.910 4.533 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.0084611 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 5.847 5.575 5.0924.675 Period 16 14.718 | 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.9746.265 5.954 5 669 5.1624.730 Period 17 15.562 14.292 13.166 12.166 11.274 10.4771 9.763 9.122 8.5448.022 7.120 6.373 6.047 5.749 5.222 4.775 Period 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.3728.756 8.201 7.250 6.467 6.128 5.818 5.2734.812 Period 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 6.198 5.877 5.3164.844 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 10.5949.818 9.129 8.514 7.469 6.623 6.259 5.929 5.353 4.870 Period 21 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 7.5626.687 6.3125.973 5.384 4.891 Period 22 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.2019.442 8.772 7.645 6.7436.359 6.011 5.410 4.909 Period 23 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.371 9.5808.883 7.718 6.792 6.399 6.044 5.432 4.925 Period 24 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.7078.985 7.7846.835 6.4346.073 5.451 4.937 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.8239.077 7.8436.8736.464 6.097 5.467 4.948 Period 26 22.795 20.12117.877 15.983 14.375 13.003 11.826 10.810 9.929 9.161 7.896 6.906 6.491 6.118 5.480 4.956 Period 27 23.560 20.707 18.327 16.330 14.643 13.211|11.987 10.935 10.027 9.237 7.943 6.935 6.514 6.136 5.492 4.964 Period 28 24.316 21.28118.764 16.663 14.898 13.406 12.137 11.051 10.116 9.307 7.984 6.961 6.534 6.152 5.5024970 Period 29 25.066 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.1989.370 8.022 6.983 6.551 6.166 5.510 4.975 Period 30 25 808 | 22 396 19600 1 17 292 015372113 765 12 409 | 11 258 110 2741 9 427 8.055 7003 6.566 16177 5.517 4 979 Print Done Reference .X 4% 7% 8% Future Value of Ordinary Annuity of 51 1% 2% 3% 6% 9% 10% 12% 14% 15% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.010 2.020 2030 2040 2050 2060 2070 2.080 2.090 2.100 2.1202.140 2.150 3.0303.060 3.091 3.122 3.153 3.184 3.215 3.246 3.278 3.310 3.374 3.440 3.473 4.060 4.122 4.1844.246 | 4.310 4.375 4.440 4.5064.573 4.641 4.779 4.921 4.993 5.101 5.204 5.309 5.416 5.526 5.637 5.7515.867 5.985 6.105 6.353 6.610 6.742 6.152 6.308 6.468 6.633 6.802 6.975 7.1537.3367.523 7.7168.115 8.536 8.754 7.214 7.4347.6627.898 8.142 8.394 8.654 8.9239.2009.487 10.09 10.73 11.07 8.286 8.583 | 8.892 | 9.2149.549 9.897 10.260 10.64 11.03 11.44 12.30 13.23 13.73 9.369 9.755 10.16 10.58 11.03 11.49 11.98 12.49 13.02 13.58 14.78 16.09 16.79 10.46 10.95 11.46 | 12.01 12.58 13.18 13.82 14 49 15.1915.94 17.55 19.34 20.30 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Period 20 Period 21 Period 22 Period 23 Period 24 Period 25 Period 26 Period 27 Period 28 Period 29 period 30 11.57 12.17 12.81 | 13.49 | 14 21 14.97 15.78 16.65 17.56 18.53 20.65 23.0424.35 12.68 | 13.41 | 14.19 15.03 15.92 16.87 17.8918.98 20.14 21.38 24 13 27.2729.00 13.81 14.68 15.62 16.63 | 17.71 18.88 20.14 21.50 22.95 | 24.52 28.03 32.09 34.35 14.95 15.97 17.09 | 18.29 | 19.60 21.02 22.55 24 21 26.02 27.98 32.39 37.58 40.50 16.10 17.29 18.60 20.02 21.58 23.28 25.13 27.15 29.36 | 31.77 37.28 43.84 47.58 17.26 18.64 20.16 21.82 | 23.66 25.67 27.89 30.32 33.00 35.95 42.75 50.98 55.72 18.43 20.01 | 21.76 23.70 25.84 28.21 30.84 33.75 36.97 40.54 48.88 59.12 65.08 19.61 21.41 23.41 25.65 28.13 30.91 34.00 37.45 | 41.30 45.60 55.7568.39 75.84 20.81 22.84 25.12 27.67 30.54 33.76 37 38 41.45 | 46.02 51.16 63.44 78.97 88.21 22.02 24.30 26.87 29.78 33.07 36.79 41.00 45.76 51.16 57.28 72.05 91.02 102.4 23.24 25.7828.68 31.97 35.72 39.99 44.87 50.42 56.76 64.00 81.70 104.8 118.8 24.47 27 30 30.5434.25 38.51 43.39 49.01 55.46 62.87 71.40 92.50 120.4 137.6 25.72 28.85 32.45 36.62 41.43 47.00 53.4460.89 69.53 79.54 104.6138.3 159.3 26.97 30.42 34.43 39.08 | 44.50 50.82 58.18 66.76 | 76.79 88.50 118.2158.7184.2 28.24 32.03 36.46 | 41.65 47.73 54.86 63.25 73.11 84.70 98.35 133.3 181.9212.8 29.53 33.67 38.55 44.3151.11 59.16 68.68 79.95 | 93.32 109.2 150.3 208.3245.7 30.82 35.3440.71 | 47.08 54.6763.71 74.48 87.35 102.7 121.1 169.4 238.5 283.6 32.13 37.05 42.93 49.97 58.40 68.53 80.70 95.34 113.0 134.2 190.7 272.9 327.1 33.45 38.79 45.22 52.97 62.32 73.64 87.35 104.0 124.1 148.6 214.6 312.13772 34 78 1 4 57 1 47 50 56 66 44 70.06 04.46 1133 1363 164 5 241 313568 4347 Print Done