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EXERCISE 6: PRESENT VALUES AND FUTURE VALUES Suppose you were offered the following options: a 10-year annuity of $10,000 at the end of each year or a $60,000 lump-sum payment today

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EXERCISE 6: PRESENT VALUES AND FUTURE VALUES Suppose you were offered the following options: a 10-year annuity of $10,000 at the end of each year or a $60,000 lump-sum payment today. If you want to make 10%, which option would you prefer? To answer this question, calculate the present value of both options and the future value of both options.