Suppose You Win a Small Lottery and You Are Given

Multiple Choice

Suppose you win a small lottery and you are given the following choice: You can receive (1) an immediate payment of $10,000 or (2) two annual payments,each in the amount of $5,200,with the first payment coming one year from now,and the second payment coming two years from now.You would choose to take the immediate payment of $10,000 if the interest rate is

A) 2 percent,but not if the interest rate is 1 percent.
B) 3 percent,but not if the interest rate is 2 percent.
C) 4 percent,but not if the interest rate is 3 percent.
D) 5 percent,but not if the interest rate is 4 percent.