Leon Long has just learned he has won a $513600 prize in the lottery. The lottery has given him two options for receiving the payments. (1) If Leon takes all the money today, the state and federal governments will deduct taxes at a rate of 48% immediately. (2) Alternatively, the lottery offers Leon a payout of 20 equal payments of $37200 with the first payment occurring when Leon turns in the winning ticket. Leon will be taxed on each of these payments at a rate of 26%.

Assuming Leon can earn an 9% rate of return (compounded annually) on any money invested during this period, compute the present value of the cash flows for annuity payout. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Present value of annuity payout

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