Now it's time for you to practice what you've learned.

Suppose that Ana just won the lottery and must choose between three award options:

A lump sum of $$35,000,000$ received today

$15$ end$-$of$-$year payments of $$4,375,000$

$40$ end$-$of$-$year payments of $$3,150,000$

Assume the interest rate is $8\mathrm{.}00\%,$ entered as $8$ on your financial calculator.

Note: Take the absolute value of the present value when answering this question.

Using a financial calculator yields a present value for option $2$ of approximately

approximately

$($when the interest rate is $8\mathrm{.}00\%).$ Based on this, Ana should choose option

if she seeks to maximize

present value.

Now assume the interest rate is $9\mathrm{.}00\%,$ entered as $9$ on your financial calculator.

Note: Take the absolute value of the present value when answering this question.

Using the table you just filled out and a financial calculator, yields a present value for option $2$ of approximately

present value for option $3$ of approximately $\_($when the interest rate is $9\mathrm{.}00\%).$ Based on this, Ana should choose option

if she seeks to maximize present value.

Assume the interest rate is $10\mathrm{.}00\%,$ entered as $10$ on your financial calculator.

Note: Take the absolute value of the present value when answering this question.

Using the table you just filled out and a financial calculator, yields a present value for option $2$ of approximately

present value for option $3$ of approximately

$\_($when the interest rate is $10\mathrm{.}00\%).$ Based on this, Ana should choose option

if she seeks to maximize present value.

As the interest rate increases, options $2$ and $3$ become

attractive, relative to option $1.$