$500,000 (lump sum) six years from now
The required rate of return is 9%. What is the present value if he selects the third option? Round to nearest whole dollar.
Present value of $1:
8% 9% 10%
1 0.926 0.917 0.909
2 0.857 0.842 0.826
3 0.794 0.772 0.751
4 0.735 0.708 0.683
5 0.681 0.65 0.621
6 0.63 0.596 0.564
7 0.583 0.547 0.513
$250,000
$230,000
$238,400
$298,000