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You win a Scratch OLG Lottery and are given 3 options to receive your financial winnings. Using a cost of money of 6% compounded annually,

  1. You win a Scratch OLG Lottery and are given 3 options to receive your financial winnings. Using a cost of money of 6% compounded annually, discount the cashflows of each option and determine which is higher. (16.1)

  1. $50,000 today and $50,000 in 2 years from today.
  2. 60,000 in 1 years from today and $40,000 in 4 years from today
  3. Receive an annuity of $8,300 year end payments for 20 years.

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