Present Value Computation

Kelly Fullerton won the state lottery and was given four choices for receiving her winnings.

1. Receive $800,000 right now.

2. Receive $832,000 in one year.

3. Receive $120,000 at the end of each year for eight years.

4. Receive $46,400 at the end of each year for 30 years.

Assuming Kelly can earn interest of four percent compounded annually, which option should Kelly choose?

Use Excel or a financial calculator for computation. Round answers to the nearest dollar.

(a)	1.	Answer
(a)	2.	Answer
(a)	3.	Answer
(a)	4.	Answer
(b)		AnswerOption 1Option 2Option 3Option 4