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Congratulations: You have won the lottery! The State of Confusion has three payment options for your...

Congratulations: You have won the lottery! The State of Confusion has three payment options for your winnings. Option 1 is a lump sum payment of $3,500,000 today; Option 2 is a lump sum payment of $5,000,000 in five years; and Option 3 is annual payments of $200,000 for the next 20 years (first payment today). Which option is the most lucrative to you in present year dollars? (Assume a 1% inflation rate and an ability to earn 4% interest on investments - Show your math for how you came to your solution.) (Part B) Condolences: You have been diagnosed with a terminal illness and the Doctors estimate you have less than two years to live. Does this diagnosis change your payment option plan selection and if yes why?

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