Stacey Trail has just won the Lotto. Her prize pays $40,000 at the end of each year for 5 years. In addition, she will receive a one-time payment of $240,000 at the end of 5 years. Using the following factors at 10%, what amount has Stacey really won in the Lotto?

Type of cash flow (n) Periods (i) Interest rate Factor

PV of $1 5 10% .62092

FV of $1 5 10% 1.61051

PV ordinary annuity 5 10% 3.79079

FV ordinary annuity 5 10% 6.10510

PV annuity due 5 10% 4.16986

Please choose one of the below answers:

a. $553,317

b. $440,000

c. $300,653

d. $484,204

Please give a step-by-step calculation on how you got the answer. Thank you very much.