Jay $\frac{?}{{?}_{?}}$ reports outstanding debt on his balance sheet of $$250,603.$ He has two options to settle the debt: He can either pay $$650,000$ at maturity in $10$ years, or he can make annual payments of

$$38,500$ for $10$ years. Payments are due at the beginning of each year. Interest is compounded annually.

$($Click the icon to view the Future Value of $$1$ table.$)$

$($Click the icon to view the Future Value of an Ordinary Annuity table.$)$

$($Click the icon to view the Future Value of an Annuity Due table.$)$

$($Click the icon to view the Present Value of $$1$ table.$)$

$($Click the icon to view the Present Value of an Ordinary Annuity table.$)$

G $($Click the icon to view the Present Value of an Annuity Due table.$)$

Requirement

If JayZ is given an interest rate of $10\%,$ which option should he select? $($Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your

calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, $x.xxxxx.$ Round your final answer to the nearest cent, $$x.xx.)$

The future value $($FV$)$ of the annual payment option amounts to

which is

the FV of the single$-$sum payout at the end of the $10-$year period. Therefore, JayZ should select the option to