The two biggest areas that most people need to understand the concept of the time value of money (TVM) is retirement and the lottery. Retirement is more important because the TVM concept allows us to put away a little money each month so that we accumulate a lot of cash for retirement in the futureand because are all much more likely to see retirement than any significant lottery winnings. We also take on debt over our lifetime, and that debt affects our ability to save. Debt repayment structure is another example of TVM. The lottery is often more fun to think about and is based on TVM, but that is not widely publicizedmost people think that if you win $100 million you will get a $100 million dollar check minus taxes. For this discussion, please answer these questions and explain your answers using concepts from the book. Suppose that you inherit $100,000. You have a $40,000 car loan at 3% for 6 years or 72 months (assume you bought the car the day before your inheritance) and the car loan interest is not tax deductible. You also have a guaranteed bond investment that pays 5% tax free, and you could put the moneyall of it or part of itinto that bond investment. What do you

do

and why (why means use class concepts to justify your decision)? Provide enough specific numbers to support and justify your answer. Suppose you win Powerball (if this is against your religious belief, please assume it for educational purposes) for $100,000,000. What are the current payout options meaning how might you opt to take the money, and which makes the most sense to you and why? Again, use TVM concepts from the book and provide enough specific numbers to support your answer. Assume federal taxes of 40% and 4% state tax. This answer is based on the objective process of TVM, not on a subjective opinion of what would be more fun.