Shelley Wants to Cash in Her Winning Lottery Ticket

Multiple Choice

Shelley wants to cash in her winning lottery ticket. She can either receive ten, $100,000 semiannual payments starting today, or she can receive a lump-sum payment now based on a 6% annual interest rate. What is the equivalent lump-sum payment?

A) $853,020.
B) $801,971.
C) $744,090.
D) $878,611.PVAD = $100,000 x 8.78611* = $878,611 *PVAD of $1: n=10; i=3%