Ted just won the lottery, and he must choose among three award options. He can elect to receive a lump sum today of $61m, to receive 10 payments of $9.5 million per year at the end of each year (the first payment occurs one year from now), or to receive 30 payments of $5.5 million per year at the end of each year (the first payment occurs one year from now).

i. If he thinks he can earn 7% annually, which should he choose?

ii. If he thinks he can earn 9% annually, which is the best choice?

iii. Explain how interest rates influence the award options.