Steve Coleman has just won the state lottery and has the following three payout

Question

Steve Coleman has just won the state lottery and has the following three payout options for after-tax prize money: 1. $166,000 per year at the end of each of the next six years. 2. $306,000 (lump sum) now 3. $518,000 (lump sum) six years from now. the annual discount rate is 9%. Compute the value of the second option. (round to the nearest whole dollar.) present value of 1: 8% 9% 10% 10.9260.9170.90920. 8570.8420.82630. 7940.7720.75140.7350. 7080.68350.6810.6500. 62160.6300.5960.57470. 5830.5470.513 A. $414,400 B. $306,000 C. $684,000 D. 103,600

Explanation / Answer

Ans is B: 306000, This is the lumpsum amount received now hence this will be its present value.

In the question present is not written before value I assumed it is present value only that is being asked.

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