Congratulations!! You have won the lottery, which entitles you to

Option 1: a lump-sum payment of $1,300,000 today

Option 2: $200,000 at the end of each year for the next 10 years

Option 3: $500,000 now with another $1,500,000 paid in a single payment at the end of 10 years.

Ignoring raxes on your winnings, which option is best if you earn 8% on your money (i.e. the market rate of interest is 8% per year)?

A. Option 1

B. Option 2

C. Option 3

D. Options 2 and 3 are equally desirable since they both result in cash payments of $2,000,000