Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose):

$8,750 per year at the end of each of the next 7 years

$50,050 (lump sum) now

$100,250 (lump sum) 7 years from now

Requirements

Calculate the present value of each scenario using a 6% discount rate. Which scenario yields the highest present value? Round to nearest whole dollar.

Would your preference change if you used a 12% discount rate?