Jose Wants to Cash in His Winning Lottery Ticket

Multiple Choice

Jose wants to cash in his winning lottery ticket. He can either receive five, $5,000 semiannual payments starting today, or he can receive a lump-sum payment now based on a 6% annual interest rate. What would be the lump-sum payment?

A) $23,586.
B) $22,899.
C) $21,565.
D) $23,000.PVAD = $ 5,000 x 4.71710* = $23,586 *PVAD of $1: n=5; i=3%