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 just won the grand prize in a national writing contest! As your prize, you will receive $2,000 a month for ten years. If you can earn 7 percent on your money, what is this prize worth to you today?    A.  $172,252.71 B.  $178,411.06 C.  $181,338.40 D.  $185,333.33 E.  $190,450.25

27.	Phil can afford $200 a month for 5 years for a car loan. If the interest rate is 7.5 percent, how much can he afford to borrow to purchase a car?    A.  $8,750.00 B.  $9,348.03 C.  $9,981.06 D.  $10,266.67 E.  $10,400.00

28.

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 6 percent on your money. Which option should you take and why?    A.  You should accept the payments because they are worth $209,414 to you today. B.  You should accept the payments because they are worth $247,800 to you today. C.  You should accept the payments because they are worth $336,000 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.