Gabrielle just won $ million in the state lottery. She is given the option of receiving $1,300,000 now, or she can elect to receive $80,000 at the end of each of the next 30 years. If Gabrielle can earn 5% annually on her investments, which option should she take?

Part 1 If Gabrielle takes the prize as an annuity, the present value of the 30-year ordinary annuity is $ ?. (Round to the nearest dollar.)

Part 2 If Gabrielle takes the prize as a single amount, the present value of the lump sum is $ ?. (Round to the nearest dollar.)

Part 3 Which alternative should be chosen?

A. Lump sum payment

B. Annuity payment