Jane Bauer has won the lottery and has the following four options for receiving her winnings:
1.Receive $100,000 at the beginning of the current year
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Question & Answer: Jane Bauer has won the lottery and has the following four options for receiving her winnings:…..
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2.Receive $108,000 at the end of the year
3.Receive $20,000 at the end of each year for eight years
4.Receive $10,000 at the end of each year for 30 years Jane can invest her winnings at an interest rate of 8% compounded annually at a major bank.
Use the appropriate present or future value table: FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1 Calculate the Present value for each of the above options. Round all answers to the nearest dollar.
Option 1 $
Option 2 $
Option 3 $
Option 4 $