You won the lottery. The state lottery offers you the following after tax payout options:

1) $15,000,000 after five years

2) $2,000,000 per year for five years

3) $11,000,000 after three years

Assuming you can earn 12% on your funds, which option would you prefer?

Present value of payout option 1: $_____

Present value of payout option 2: $_____

Present value of payout option 3: $_____

The most favorable option is:

18% Present Value of $1 Periods 1% 2% 3%. 4% 5%. 6% 8% 9% 10% 12% 15%. 16% 211% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.8620.847 0833 eriod 2 0.980 0.961 0.943 0.925 0.907 0890 0.873 0.8570.842 0.826 0.797 0.769 0.756 0.743 0.7180.694 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.6660.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0335 Period 7 0.933 0871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 Period 3 0.923 0.853 0.789 0.731 0.677 0.627 0.5820540 0.502 0.467 0.4040.351 0.327 0.305 0.266 0233 Period 9 0.914 0837 0.766 0.703 0.645 0.5920544 0.500 0.460 0.4240361 0.308 0.284 0263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0247 0.227 0.191 0.162 Period 110.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0215 0.195 0.162 0.135 Period 120.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 Period 130.879 0.773 0.681 0.601 0.530 0.4690415 0.368 0326 0.290 0.229 0.182 0.163 0.145 0.116 0.093 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0 205 0.160 0.141 0.125 0.099 0.078 Period 15 0.861 0.743 0.642 0.565 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 Period 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0071 0.054 Period 170844 0.714 0.605 0.513 0.436 0.371 0317 0 2700 231 0.198 0.146 0.108 0093 0.080 060 0.045 Period 18 In 36 in 700 n 587 1 494 1 0 416 350 1 296 250 0 212 In 180 n 130 in 95 n 181 n 19 051. LA ORA 18% Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6%. 9% 10% 12% 15% 16% 20% Period 1 0 990 0.980 0.971 0.962 0.952 0.943 0.9350 926 0.917 0.909 0.893 0877 0.8700 862 0.847 0833 Period 2 1970 1.942 1913 1886 1859 1.833 1808 1.783 1.759 1.736 1690 1647 1626 1.605 1.566 1.528 Period 3 2.9412.884 2829 2.775 2.723 2.673 2624 2.577 2 531 2.487 2.402 2322 2283 2246 2.174 2106 Period 4 3.902 3.808 3.717 3.630 3546 3.465 3.387 3.312 3240 3.170 3.037 2.914 2855 2.798 2.690 2.589 Period 5 4.853 4.713 4580 4.452 4.329 4.212 4.100 3.9933 890 3.791 | 3.605 3.433 3.352 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.4864.355 4111 3.8893.784 3.685 3.498 3.326 Period 7 6.728 6.472 6230 6.002 5.786 5.582 5.389 5.206 5.033 4868 4564 4.288 4.16040393 812 3 605 Period 3 7.652 7.325 7.020 6.733 6.463 6210 5.971 5.747 5535 5335 4.968 4639 4.487 4,344 4078 3837 Period 9 8566 8.162 7 786 7.435 7.108 6.802 6.515 6247 5.995 5.759 5,328 4.946 4.772 4.607 4.303 4031 Period 10 9.471 8.9838.530 8.111 7.722 7.360 7.0246.710 6.418 6.145 5.650 5.216 5.019 48334494 4.192 Period 11 10.368 9.7879.2538.760 8.306 7.887 7.499 7.139 6.8056.495 5.938 5.453 5.234 5.029 4656 4327 Period 12 11.255 105759.95493858.863 8.384 7943 7536 7.1616.814 6.194 5.660 5.421 5.197 4.793 4.439 Period 13 12.134 11 348 10.6359.986 9.394 88538.358 7.904 7.487 7.1036.424 58425583 5.342 4910 4533 Period 14 13.004 12 106 11.296 10.563 9.899 9.295 8.745 8 2447.786 7.3676.628 6.002 5.724 5468 5.008 4611 Period 15 13.865 12 849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 61425.847 5575 5.092 4675 Period 16 14718 13.578 12 561 11.652 10.838 10.106 9.447 8 851 8.313 7.824 6.9746.265 5.954 5.669 5.1624.730 Period 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8544 8022 7.1206.373 6047 5749 5222 4.775 Perind 18 16 398 14992 | 13 75412 659 11 han lin 828 10 059 9 372 1 8 756 8 201 1 7 250 1467 128 15 118 15.273 | 4812 10% Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Future Value of $1 1% 2%. 3% 4% 5% 6% 7% 8% 9% 12%. 14% 15% 1,010 1.020 1.030 1.040 1.050 1.060 1.070 1.080 1.090 1.100 1.120 1.140 1.150 1.020 1.040 1.061 1.082 1.103 1.124 1.145 1.166 1.1881.210 1.254 1.300 1.323 1.030 1.061 1.093 1.125 1.158 1.191 1.225 1.260 1.295 | 1.331 1.405 1.482 1.521 1.041 1.082 1.126 1.170 1.216 1.262 1.311 1.360 1.4121.464 1.574 1.689 1.749 1.051 1.104 1.159 1.217 1.276 1.338 1.403 1.469 1.539 1.611 1.762 1.925 2.011 1.062 1.126 1.194 1.265 1.340 1.419 1.501 1.587 1.6771.772 1.974 2.195 2.313 1.072 1.149 1.230 1.316 1.407 1.504 1.606 1.714 1.8281.949 2.211 2.502 2.660 1.083 1.172 1.267 1.369 1.477 1.594 1.718 1.851 1.993 2.144 2.476 2.853 3.059 1.094 1.195 1.305 1.423 1.551 1.689 1.838 1.999 2.172 2.358 2.7733.2523518 1.105 1.219 1.344 1.480 1.629 1.791 1.967 2.159 2.367 2.594 3.106 3.707 4.046 1.116 1.243 1.384 1.539 1.710 1.898 2.105 2.332 2.580 2.8533.479 4.226 4.652 1.127 1.268 1.426 1.601 1.796 2.012 2.252 2518 2.8133.138 3.896 4.818 5.350 1.138 1.294 1.469 1.665 1.886 2.133 2.410 2.720 3.066 3.452 4.363 5.492 6.153 1.149 1.319 1.513 1.732 1.980 2261 2.579 2.937 3.342 3.798 4.887 6.2617.076 1.161 1346 1.558 1.801 2.079 2.3972.759 3.172 3.642 4.177 5.474 7.138 8.137 1.173 1373 1.605 1.873 2.183 2.540 2.952 3.426 3.970 4.595 6.130 8.1379.358 1.184 1.400 1.653 1.948 2.292 2.6933.159 3.700 4.328 5.054 6.866 9.276 10.76 1 196 1 498 1712 1 2 126 12 407 1 2 854 3 380 13 996 | 4717 1 55607 690 10 58 12 38 Future Value of Ordinary Annuity of $1 Penods 2%. 4% 5% 6% 7% 9% 10% 12% 14% 15% Period 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Period 2 2.010 2.020 2030 2040 2.050 2.060 2.070 2.080 2.090 2.100 2.1202.140 2.150 Period 3 3.030 3.0603.091 3.122 3.153 3.1843.215 3.246 3.278 3.3103 374 3.440 3.473 Period 4 4.060 4.122 4.184 4.246 4.310 4.375 4.440 4.506 4573 46414.779 4.921 4993 Perled 5 5.101 5.2045.309 5.416 5.526 5.637 5.7515.8675.985 6.105 6.353 6.610 6.742 Period 6.152 6.308 6.468 6.633 6.802 6.975 7.153 73367.523 7.716 8.115 8.536 8.754 Period 7 7.214 7.4347.6627.898 8.142 8.394 8.654 8.9239.2009.487 10.09 10.73 11.07 Period 8 8.286 8.5838.8929.214 9.5499.897 10.260 10.64 | 11.03 | 11.44 12.30 13.23 13.73 Period 9 9.369 9.755 10.16 10.58 11.03 11.49 11.98 12.49 13.02 13.58 14.78 16,09 16.79 Period 10 10.46 10.95 11.46 12.01 12.58 13.18 13.82 14.49 15.19 15.94 1755 19.34 20 30 Period 11 11.57 12.17 12.81 13.49 14.21 14.97 15.78 16.65 17.56 18.53 20.65 23.04 24.35 Period 12 12.68 13.41 14.19 15.03 15.92 16.87 17.89 18.98 20.14 21.38 24.13 27.27 29.00 Period 13 13.81 14.68 15.62 16.63 17.71 18.88 20.14 21.50 22.95 2452 28.03 32.09 3435 Period 14 14.95 15.97 17.0918.29 19.60 21.02 22.55 24.21 26.02 27.98 32.39 37.58 40.50 Period 15 16.10 17.29 18.60 20.02 21.58 23.28 25.13 27.15 29.36 31.77 37.28 43.84 47 58 Period 16 17.26 18.64 20.16 21.8223.66 25.67 27.89 30 32 33.00 36.95 42.75 50.98 55.72 Period 17 18.43 20.01 21.76 23.70 25.84 28 21 30.84 33.75 36.97 4054 48 88 59.12 65.08 Period 18 19 61 | 21 41 1 23 41 2565 | 28 13 30 91 34 0 37 45 | 41 30 45 55 75 68 39 75 84