Michael has just won the lottery after purchasing one $15 lottery ticket. The state offers him the following three payout options for after-tax prize money: 1. $75,000 per year at the end of each of the next five years 2. $500,000 (lump sum) now 3. $695,000 (lump sum) five years from now Calculate the present value of each scenario using an 8% discount rate. Present value of annuity of $1: 7% 1 0.935 2 1.808 3 2.624 14 3.387 5 4.1 8% 0.926 1.783 2.577 3.312 3.993 9% 0.917 1.759 2.531 3.24 3.89 9% Present value of $1: 7% 1 0.935 2 0.873 3 0.816 14 0.763 5 0.713 8% 0.926 0.857 0.794 0.735 0.681 0.917 0.842 0.772 0.708 0.65