Margaret Will Receive an Insurance Settlement of $3,000,000 in Five

Multiple Choice

Margaret will receive an insurance settlement of $3,000,000 in five years. Randall is willing to give her a lump sum today in return for the payment in five years. If current interest rates are 12% per year, how much will Margaret receive today?

A) $960,637
B) $1,702,281
C) $1,116,790
D) $1,800,000