Gloria Ammon Has Just Won the State Lottery and Has

question 103

Multiple Choice

Gloria Ammon has just won the state lottery and has the following three payout options for after-tax prize money: 1.$64,000 per year at the end of each of the next six years
2) $304,000 (lump sum) now
3) $502,000 (lump sum) six years from now
The annual discount rate is 9%.Compute the present value of the third option.(Round to nearest whole dollar.)
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) $240,000
• B) $98,133
• C) $101,717
• D) $299,192

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The belief that religion should play no role in public life.

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