Suppose You Have a Winning Lottery Ticket and You Are

Multiple Choice

Suppose you have a winning lottery ticket and you are given the option of accepting $3,000,000 three years from now or taking the present value of the $3,000,000 now. The sponsor of the prize uses a 5% discount rate. If you elect to receive the present value of the prize now, the amount you will receive is

A) $2,591,520.
B) $2,518,860.
C) $2,670,000.
D) $3,000,000.