Use the following data to answer questions 2 and 3. You plan to lease an office building for 10 years. You have a choice of three types of rent payments.

1. A lump sum cash payment of $80,000
2. 10 annual payments of $10,000 each, the first occurring immediately
3. 120 monthly payments of $800 each, the first occurring immediately. (Use a spreadsheet to calculate this part).

Question 2:

Assume an effective annual discount rate of 5%, which option would you choose to minimize your expense?

Option 1: Lump sum cash payment

Option 2: 10 annual yearly payments

Option 3: 120 monthly payments. (Correct Answer)

Question 3:

Based on the correct answer from question 2 what is the present value of this option? Round your answer to the nearest whole dollar with $ sign (example $5,436.75 enter as 5,437)

*Please answer Question 3 here