Felice Lucas Has Just Won the State Lottery and Has

question 38

Multiple Choice

Felice Lucas has just won the state lottery and has the following three payout options for after-tax prize money: 1.$170,000 per year at the end of each of the next six years
2) $312,000 (lump sum) now
3) $508,000 (lump sum) six years from now
The annual discount rate is 9%.Compute the present value of the first option.(Round your answer to the nearest whole dollar.)
Present value of an ordinary annuity of $1:
$$\begin{array} { | r | r | r | r | } \hline & 8 \% & 9 \% & 10 \% \\\hline 1 & 0.926 & 0.917 & 0.909 \\\hline 2 & 1.783 & 1.759 & 1.736 \\\hline 3 & 2.577 & 2.531 & 2.487 \\\hline 4 & 3.312 & 3.240 & 3.170 \\\hline 5 & 3.993 & 3.890 & 3.791 \\\hline 6 & 4.623 & 4.486 & 4.355 \\\hline 7 & 5.206 & 5.033 & 4.868 \\\hline\end{array}$$ Present value of $1:
$$\begin{array} { | c | c | c | c | } \hline & 8 \% & 9 \% & 10 \% \\\hline 1 & 0.926 & 0.917 & 0.909 \\\hline 2 & 0.857 & 0.842 & 0.826 \\\hline 3 & 0.794 & 0.772 & 0.751 \\\hline 4 & 0.735 & 0.708 & 0.683 \\\hline 5 & 0.681 & 0.650 & 0.621 \\\hline 6 & 0.630 & 0.596 & 0.564 \\\hline 7 & 0.583 & 0.547 & 0.513 \\\hline\end{array}$$

• A) $850,000
• B) $762,620
• C) $482,000
• D) $457,251

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The act of swelling, protruding, or sticking out beyond the usual surface level, often indicative of an underlying condition or pressure buildup.

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The technique of examining parts of the body by touch, especially for medical purposes to detect abnormal conditions.

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A discomfort or pain felt anywhere in the region between the chest and the groin.

Tibia

A large bone in the lower leg (shinbone) that runs below the knee to the ankle, and is a key component in supporting the body’s weight.