Ken Jones has just won the state lottery. The state offers the following three payout options for after-tax prize money: $50,000 per year at the end...

Ken Jones has just won the state lottery. The state offers the following three payout options for after-tax prize money:

1. $50,000 per year at the end of each of the next six years

2. $300,000 (lump sum) now

3. $400,000 (lump sum) six years from now

Calculate the present value of each scenario using an 8% annual discount rate. Round to nearest whole dollar.

Present value of an ordinary annuity of $1:

   7%   8%   9%

1   0.935   0.926   0.917

2   1.808   1.783   1.759

3   2.624   2.577   2.531

4   3.387   3.312   3.240

5   4.100   3.993   3.890

6   4.767   4.623   4.486

Present value of $1:

   7%   8%   9%

1   0.935   0.926   0.917

2   0.873   0.857   0.842

3   0.816   0.794   0.772

4   0.763   0.735   0.708

5   0.713   0.681   0.650

6   0.666   0.630   0.596