Congratulations! You've won a state lotto! The state lottery offers you the following (after-tax) payout options:
Calculate the present value for each payout.
| Option #1: | $14,500,000 five years from now |
| Option #2: | $2,300,000 at the end of each year for the next five years |
| Option #3: | $14,000,000 three years from now The option you would you prefer is the one that has the _____(highest, lowest) present value. Therefore,______ (option 1,option 2, option 3) would be the preferred payout option. |
Reference Present Value of $1 Periods 1 2 3 4 5 1% 0.990 0.980 0.971 0.961 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 6 7 0.942 0.933 0.923 0.914 0.905 0.888 0.871 0.853 0.837 0.820 8 9 10 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.507 0.452 0.404 0.361 0.322 0.370 0.314 0.266 0.225 0.191 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 11 12 13 14 15 0.896 0.887 0.879 0.870 0.861 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0555 0.585 0.557 0.530 0.505 0.481 0.527 0.497 0.469 0.442 0.417 0.429 0.397 0.368 0.340 0.315 0.350 0.319 0.290 0.263 0.239 0.149 0.092 0.057 0.022 0.287 0.257 0.229 0.205 0.183 0.237 0.208 0.182 0.160 0.140 0.162 0.137 0.116 0.099 0.084 20 25 30 40 0.820 0.780 0.742 0.672 0.673 0.610 0.552 0.453 0.554 0.478 0.412 0.307 0.456 0.375 0.308 0.208 0.377 0.295 0.231 0.142 0.312 0.233 0.174 0.097 0.215 0.146 0 099 0.046 0.104 0.059 0.033 0.011 0.073 0.038 0.020 0.005 0.051 0.024 0.012 0.003 0.037 0.016 0.007 0.001 0.026 0.010 0.004 0.001 Print Done Reference Future Value of $1 Periods 18% 1.180 20% 1.200 1 1 392 1440 2 3 4 5 19 1 010 1020 1.030 1.041 1051 2% 1020 1.040 1.061 1.062 1.104 1.030 1.061 1.093 1.126 1.159 5% 1.050 1.103 1.158 1.216 1.276 8% 1.080 1.166 1.260 1.360 1.469 14% 1.140 1300 1.482 1.689 1925 16% 1.160 1.346 1.561 1.811 2.100 1.643 1939 2.288 1.728 2.074 2.488 1.060 1.124 1.191 1.262 1.338 1.419 1504 1594 1689 1.791 6 1.062 1072 1083 1.094 1.105 1.126 1.149 1.172 1.195 1219 1.194 1.230 1.267 1.305 1.040 1.082 1.125 1.170 1217 1.265 1.316 1.369 1.423 1480 1539 1.601 1665 1.732 1.801 1.340 1.407 1.477 1.551 1.629 1.587 1.714 1.851 10% 1.100 1.210 1.331 1.464 1.611 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4 177 12% 1.120 1.254 1405 1 574 1.762 1974 2.211 2.476 2773 3.106 3.479 3.896 4.363 4.887 5 474 B 2.195 2502 2853 3.252 3.707 2.436 2.826 3.278 3.803 4411 2.700 3.185 3.759 4.435 5.234 2 986 3.583 4.300 5.160 6.192 1999 10 11 12 13 14 15 20 25 30 40 1384 1.426 1.469 1.513 1.558 1.116 1.127 1.138 1.149 1.161 1.220 1 282 1.348 1.489 1.710 1.796 1.886 1.980 2079 2653 3.386 4322 7.040 4226 4.818 5.492 6.261 7 138 1.243 1.268 1.294 1319 1346 1 486 1641 1 811 2208 1.898 2012 2.133 2.261 2.397 5.117 5.936 6.886 7.988 9.266 2.159 2332 2518 2720 2937 3.172 6.176 7.288 8.599 10.147 11 974 7.430 8.916 10.699 12.839 15.407 1 806 2.094 2.427 3.262 2.191 2666 3.243 4.801 3.207 4292 5.743 10.286 4661 6.848 10.063 21.725 6.727 10.835 17.449 45.259 9.646 17.000 29.950 93051 13.743 26.462 50.950 188 884 19.461 40 874 85.850 378.721 27.393 62 669 143 371 750.378 38.338 95 396 237.376 1.469.772 Print Done Reference Present Value of Annuity of $1 12% 0.893 1.690 2.402 3.037 3.605 14% 0.877 1.647 2322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2 174 2.690 3.127 20% 0.833 1.528 2.106 2589 2.991 7 od Periods 1% 2% 3% 4% 5% 6% 8% 10% 0.990 0 980 0.962 0.971 20. 0.943 0.952 0.926 0.909 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 000 3 2.941 2884 2.829 2.775 2.723 2.673 2.577 2.487 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 6 5.795 5.601 5.417 5.242 5,076 4.917 4.623 4.355 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 11 10.368 9.787 9253 8.760 8.306 7.887 7.139 6.495 12 11 255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 14 13.004 12.106 11 296 10.563 9.899 9.295 8.244 7.367 15 13.865 12.849 11.938.11.11810.380 9.712 8.559 7.606 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 30 25.808 22.396 19.600 17.292 15.372 13.765 11.2589.427 40 mber in the 32.835 27.355 23.115 19.793 17 159 15.046 11.925 9.779 4.111 4.564 4.968 5.328 5.650 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 5.938 6.194 6.424 6.628 6.811 7.469 7.843 8.055 8.244 5.453 5.660 5.842 6.002 6.142 6.623 6.873 7.003 7.105 5.029 5.197 5.342 5468 5.575 5.929 6.097 6.177 6.233 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 5.353 5.467 5.517 5.548 4.870 4.948 4.979 4.997 Print Done on #1: len #2. tion #3 0 Reference Periods 1 2. 3 4 5 196 1.000 2010 3.030 4.060 5.101 2% 1.000 2020 3.060 4122 5.204 3% 1.000 2030 3.091 4.184 5.309 12% 1.000 2.120 3.374 4779 6353 14% 1.000 2.140 3.440 4921 6.610 8.536 10.730 13.233 16% 1.000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3572 5.215 7.154 6 7 B 9 10 20% 1.000 2 200 3.640 5.368 7.442 9.930 12.916 16.499 20.799 25 059 6468 7.662 8.892 10 159 11464 4% 1000 2040 3.122 4246 5.416 6.833 7890 9.214 10.583 12.006 13.486 15 026 16 627 18.292 20.024 29.778 41 646 56085 95.026 Future Value of Annuity of $1 5% 8% 10% 1.000 1.000 1.000 1.000 2.050 2.050 2080 2.100 3.153 3.184 3.246 3310 4310 4 375 4.506 4.641 5.526 5637 5.867 6.105 6.802 6.975 7.336 7.716 8.142 8.394 8.923 9.487 9.549 9.897 10.637 11.436 11027 11.491 12.488 13.579 12578 13.181 14487 15 937 14 207 14.972 16.845 18.531 15 917 16.870 18.977 21.384 17.713 18.882 21.495 24.523 19.599 21 015 24 215 27 975 21579 23 276 27.152 31.772 33,066 36.786 45.762 57 275 47.727 54 855 73 105 98 347 66 439 79,058 113.283 164 494 120.800 154.762 259 057 442.593 8.977 11.414 14 240 17.519 21.321 9.442 12.142 15.327 19.086 23 521 16.085 6.152 7.214 8.286 9369 10.462 11.567 12.683 13 809 14947 15.097 22019 28.243 34.785 48 886 19.337 6.308 7.434 8.583 9.755 10.950 12.109 13.412 14.680 15 974 17 293 24 297 32030 40 568 60402 11 12 13 14 15 20 25 30 40 12808 14.192 15 618 17.066 18599 26.870 35 459 47.575 75.401 8. 115 10089 12300 14.776 17 549 20.655 24133 28.029 32.393 37 280 72.052 133 334 241 333 767091 23.045 27 271 32.089 37.581 43.842 25.733 30.850 36.786 43672 51 660 28.755 32.150 34 931 39.581 42.219 48 497 50.818 59.196 60.965 72035 148.628 186688 342 603 471.981 790 948 1,181 882 4,163.2137.343.858 91 025 115 380 181.871 249 214 356.787 530 312 1,342 0252360.757 Ente Print Done TOSHIBA Reference Present Value of $1 Periods 1 2 3 4 5 1% 0.990 0.980 0.971 0.961 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 6 7 0.942 0.933 0.923 0.914 0.905 0.888 0.871 0.853 0.837 0.820 8 9 10 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.507 0.452 0.404 0.361 0.322 0.370 0.314 0.266 0.225 0.191 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 11 12 13 14 15 0.896 0.887 0.879 0.870 0.861 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0555 0.585 0.557 0.530 0.505 0.481 0.527 0.497 0.469 0.442 0.417 0.429 0.397 0.368 0.340 0.315 0.350 0.319 0.290 0.263 0.239 0.149 0.092 0.057 0.022 0.287 0.257 0.229 0.205 0.183 0.237 0.208 0.182 0.160 0.140 0.162 0.137 0.116 0.099 0.084 20 25 30 40 0.820 0.780 0.742 0.672 0.673 0.610 0.552 0.453 0.554 0.478 0.412 0.307 0.456 0.375 0.308 0.208 0.377 0.295 0.231 0.142 0.312 0.233 0.174 0.097 0.215 0.146 0 099 0.046 0.104 0.059 0.033 0.011 0.073 0.038 0.020 0.005 0.051 0.024 0.012 0.003 0.037 0.016 0.007 0.001 0.026 0.010 0.004 0.001 Print Done Reference Future Value of $1 Periods 18% 1.180 20% 1.200 1 1 392 1440 2 3 4 5 19 1 010 1020 1.030 1.041 1051 2% 1020 1.040 1.061 1.062 1.104 1.030 1.061 1.093 1.126 1.159 5% 1.050 1.103 1.158 1.216 1.276 8% 1.080 1.166 1.260 1.360 1.469 14% 1.140 1300 1.482 1.689 1925 16% 1.160 1.346 1.561 1.811 2.100 1.643 1939 2.288 1.728 2.074 2.488 1.060 1.124 1.191 1.262 1.338 1.419 1504 1594 1689 1.791 6 1.062 1072 1083 1.094 1.105 1.126 1.149 1.172 1.195 1219 1.194 1.230 1.267 1.305 1.040 1.082 1.125 1.170 1217 1.265 1.316 1.369 1.423 1480 1539 1.601 1665 1.732 1.801 1.340 1.407 1.477 1.551 1.629 1.587 1.714 1.851 10% 1.100 1.210 1.331 1.464 1.611 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4 177 12% 1.120 1.254 1405 1 574 1.762 1974 2.211 2.476 2773 3.106 3.479 3.896 4.363 4.887 5 474 B 2.195 2502 2853 3.252 3.707 2.436 2.826 3.278 3.803 4411 2.700 3.185 3.759 4.435 5.234 2 986 3.583 4.300 5.160 6.192 1999 10 11 12 13 14 15 20 25 30 40 1384 1.426 1.469 1.513 1.558 1.116 1.127 1.138 1.149 1.161 1.220 1 282 1.348 1.489 1.710 1.796 1.886 1.980 2079 2653 3.386 4322 7.040 4226 4.818 5.492 6.261 7 138 1.243 1.268 1.294 1319 1346 1 486 1641 1 811 2208 1.898 2012 2.133 2.261 2.397 5.117 5.936 6.886 7.988 9.266 2.159 2332 2518 2720 2937 3.172 6.176 7.288 8.599 10.147 11 974 7.430 8.916 10.699 12.839 15.407 1 806 2.094 2.427 3.262 2.191 2666 3.243 4.801 3.207 4292 5.743 10.286 4661 6.848 10.063 21.725 6.727 10.835 17.449 45.259 9.646 17.000 29.950 93051 13.743 26.462 50.950 188 884 19.461 40 874 85.850 378.721 27.393 62 669 143 371 750.378 38.338 95 396 237.376 1.469.772 Print Done Reference Present Value of Annuity of $1 12% 0.893 1.690 2.402 3.037 3.605 14% 0.877 1.647 2322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2 174 2.690 3.127 20% 0.833 1.528 2.106 2589 2.991 7 od Periods 1% 2% 3% 4% 5% 6% 8% 10% 0.990 0 980 0.962 0.971 20. 0.943 0.952 0.926 0.909 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 000 3 2.941 2884 2.829 2.775 2.723 2.673 2.577 2.487 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 6 5.795 5.601 5.417 5.242 5,076 4.917 4.623 4.355 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 11 10.368 9.787 9253 8.760 8.306 7.887 7.139 6.495 12 11 255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 14 13.004 12.106 11 296 10.563 9.899 9.295 8.244 7.367 15 13.865 12.849 11.938.11.11810.380 9.712 8.559 7.606 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 30 25.808 22.396 19.600 17.292 15.372 13.765 11.2589.427 40 mber in the 32.835 27.355 23.115 19.793 17 159 15.046 11.925 9.779 4.111 4.564 4.968 5.328 5.650 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 5.938 6.194 6.424 6.628 6.811 7.469 7.843 8.055 8.244 5.453 5.660 5.842 6.002 6.142 6.623 6.873 7.003 7.105 5.029 5.197 5.342 5468 5.575 5.929 6.097 6.177 6.233 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 5.353 5.467 5.517 5.548 4.870 4.948 4.979 4.997 Print Done on #1: len #2. tion #3 0 Reference Periods 1 2. 3 4 5 196 1.000 2010 3.030 4.060 5.101 2% 1.000 2020 3.060 4122 5.204 3% 1.000 2030 3.091 4.184 5.309 12% 1.000 2.120 3.374 4779 6353 14% 1.000 2.140 3.440 4921 6.610 8.536 10.730 13.233 16% 1.000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3572 5.215 7.154 6 7 B 9 10 20% 1.000 2 200 3.640 5.368 7.442 9.930 12.916 16.499 20.799 25 059 6468 7.662 8.892 10 159 11464 4% 1000 2040 3.122 4246 5.416 6.833 7890 9.214 10.583 12.006 13.486 15 026 16 627 18.292 20.024 29.778 41 646 56085 95.026 Future Value of Annuity of $1 5% 8% 10% 1.000 1.000 1.000 1.000 2.050 2.050 2080 2.100 3.153 3.184 3.246 3310 4310 4 375 4.506 4.641 5.526 5637 5.867 6.105 6.802 6.975 7.336 7.716 8.142 8.394 8.923 9.487 9.549 9.897 10.637 11.436 11027 11.491 12.488 13.579 12578 13.181 14487 15 937 14 207 14.972 16.845 18.531 15 917 16.870 18.977 21.384 17.713 18.882 21.495 24.523 19.599 21 015 24 215 27 975 21579 23 276 27.152 31.772 33,066 36.786 45.762 57 275 47.727 54 855 73 105 98 347 66 439 79,058 113.283 164 494 120.800 154.762 259 057 442.593 8.977 11.414 14 240 17.519 21.321 9.442 12.142 15.327 19.086 23 521 16.085 6.152 7.214 8.286 9369 10.462 11.567 12.683 13 809 14947 15.097 22019 28.243 34.785 48 886 19.337 6.308 7.434 8.583 9.755 10.950 12.109 13.412 14.680 15 974 17 293 24 297 32030 40 568 60402 11 12 13 14 15 20 25 30 40 12808 14.192 15 618 17.066 18599 26.870 35 459 47.575 75.401 8. 115 10089 12300 14.776 17 549 20.655 24133 28.029 32.393 37 280 72.052 133 334 241 333 767091 23.045 27 271 32.089 37.581 43.842 25.733 30.850 36.786 43672 51 660 28.755 32.150 34 931 39.581 42.219 48 497 50.818 59.196 60.965 72035 148.628 186688 342 603 471.981 790 948 1,181 882 4,163.2137.343.858 91 025 115 380 181.871 249 214 356.787 530 312 1,342 0252360.757 Ente Print Done TOSHIBA
