As a winner of a breakfast cereal competition, you can chooseone of the following prizes:
- $100,000 now.
- $100,000 at the end of 5 years.
- $10,000 a year forever (starting from this year).
- $11,000 a year forever (starting from next year).
- $2,000 next year and increasing thereafter by 2% a yearforever
- $6,000 starting this year, growing at 1% per annum
- $800,000 at the end of 20 years
- $5,000 a year for 5 years starting next year
- $1,000 a year, starting this year for 12 payments
- $10,000 in year 2 and $50,000 in year 5
If the interest rate is 5%, which is the most valuable prize?Show your working for each.
