Value today: Interest Rate What is the present value of a string of payments of $125 received monthly over 30 years if the annual interest rate is 4%. 6%, 8%, 10%, or 12%? 4% 6% 8% 10% 12% You are involved in a lawsuit, you have agreed to settle it today. Would you prefer $250,000 now or $2,000 per month for 20 years? What is the present value of the payments? You think that you can earn 5% on the money. P.V. of payments 250,000 Lump sum today Best option What is the present value of a lump sum payment in 5 years of $100,000 is the interest rate is 4%