Kevin has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $125,000 cash payment today. The second option is to receive $24,100 at the end of each of the next 19 years and a $22,700 lump sum payment in the 20th year. Kevin can invest money at a 7% rate. Click here to view the factor table. (a) Calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)

		Option 1		Option 2
Present value		$enter a dollar amount		$enter a dollar amount

Which option should Kevin choose to receive his winnings?

select an option Option 1Option 2

(b) If Kevin could invest money at 10%, calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)

		Option 1		Option 2
Present value		$enter a dollar amount		$enter a dollar amount

Which option should he choose?

select an option Option 2Option 1

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