Silvia Jackson won a lottery. She will have a choice of receiving $20,000 at the end of each year for the next 25 years, or a lump sum today. If she chooses to receive $20,000, the payment will start 3 years from today, she can earn a return of 10 percent on any investment she makes.

What is the present value (today) of the annuity payments with the current offer? (i.ereceiving $20,000 at the end of each year for the next 25 years starting 3 years from today)

Answer 1

Choose...

200,000

150,033.71

165,289.25

150,262.96

181,540.80

177064.50

What will be the present value (today) if the payment of $20,000 continues forever?