Present Value and Future Value Worksheet

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4. A lottery winner is given two options:
Option I: Receive a $20 million lump-sum payment.
Option II: Receive 25 equal annual payments totaling $60 million, with the first payment
occurring immediately.
If you can earn money at 6% interest compounded annually during that long period,
which option is better?
5. In a recent year, Ford was offering the choice of 1.9% loan for 36 months or $1000 cash
back on the purchase of a $28,000 Taurus.
a. If you take the 1.9% loan offer, how much will your monthly payment be?
b. If you take the $1000 cash-back offer and can borrow money at your local bank at 6%
interest compounded monthly for 3 years, how much will your monthly payment be?
c. Which option is more favorable to you?

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math

calculus

future value

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