The Hilton Hotel is offering a $4,000 grand prize to one lucky winner. $1,000 will be paid on the day of the drawing. The remaining $3,000 will be paid in three annual payments of $1,000 each, starting one year after the drawing. How much would this prize be worth to you if you can earn 7 percent on your money?

1. $4,000

2. $3,000

3. $3,624

4. $3,387

5. $2,545