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Options for receiving the insurance proceeds

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You are the beneficiary of a life insurance policy. The insurance, company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. You can earn 10 percent on your money. Which option should you take and why?

Group of answer choices

You should accept the payments because they are worth $219,415 to you today.

You should accept the $200,000 because the payments are only worth $145,075 to you today.

You should accept the $200,000 because the payments are only worth $195,413 to you today.

You should accept the $200,000 because the payments are only worth $100,123 to you today.

Reference no: EM133004378

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