"Problem 4 (11 points) You have recently won the super jackpot in the Conch Republic Lottery. On reading the fine print, you discover that you have the following three options: Option 1: You will receive 31 annual payments of $175,000, with the first payment being delivered today. The payments will be taxed at a rate of 28 percent. Option 2: You will receive $530,000 now, and you will not have to pay taxes on this amount. In addition, beginning one year from today, you will receive $125,000 each year for 30 years. These payments will be taxed at 32 percent. Option 3: You will receive $150,000 now, and you will not have to pay taxes on this amount. The payment next year will be $125,000 and will grow at 4 percent per year for 30 payments. These payments will be taxed at a rate of 30 percent. All taxes will be withheld when the checks are issued. Using an APR of 10 percent compounded monthly, which option should you select? "

Option 1:
	Total annual payments		31
	Annual payments		$ 175,000
	Tax rate		28%
Option 2:
	Payment today		$ 530,000
	Total annual payments		30
	Annual payments		$ 125,000
	Tax rate		32%
Option 3:
	Payment today		$ 150,000
	Total annual payments		30
	Annual payments		$ 125,000
	Payment growth rate		4%
	Tax rate		30%
APR			10%
Compounding periods			12

(In Excel please, thank you!)