Question $22$

Congratulations, you've just won the $$3,800,000$ state lottery! The lottery commission offers you the choice of $$173,000$ per year for $25$ years or a one$-$lime$,$ lump$-$sum payment of $$1,862,000$ it your intersis of annual cash flow or lump$-$sum$)$ for retirement in an account that earns $15\mathrm{.}00\%$ annually, which payment option should you choose?

Take the lump$-$sum payment now because the present value of the annuity is less than the lump$-$sum payment.

Take the lump$-$sum payment now because the present value of the annuity is greater than the lump$-$sum payment.

You are indifferent between the lump$-$sum or annuity payment because the present value of the annuity is less than the lump$-$sum payment.

Choose the annual payment because the present value of the annuity is less than the lump$-$sum payment.

Choose the annual payment because the present value of the annuity is greater than the lump$-$sum payment.