Little J reports outstanding debt on his balance sheet of $$532,709.$ He has two options to settle the debt: He can either pay

$$900,000$ at maturity in $9$ years, or he can make annual payments of $$85,000$ for $9$ years. Payments are due at the beginning

of each year. Interest is compounded annually.

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

$($Click the icon to view the Future Value of an Ordinary

$($Click the icon to view the Present Value of an

Annuity table.$)$

Ordinary Annuity table.$)$

$($Click the icon to view the Future Value of an Annuity

$($Click the icon to view the Present Value of an

Due table.$)$

Annuity Due table.$)$

Requirement

If Little $J$ is given an interest rate of $6\%,$ 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,

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 $9-$year period. Therefore, Little $J$ should select the option to