2. You have a life insurance policy that provides two options for receiving the insurance...
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2. You have a life insurance policy that provides 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. If you can earn 6 percent on your money, which option should you take and why?
A) You should accept the payments because they are worth $202,414 to you today.
B) You should accept the payments because they are worth $201,846 to you today.
C) You should accept the payments because they are worth $201,210 to you today.
D) You should accept the $200,000 because the payments are only worth $189,311 to you today.
E) You should accept the $200,000 because the payments are only worth $195,413 to you today.
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