You have recently won the super jackpot in the Washington State Lottery. On reading the fine print, you discover that you have the following two options:

a. You will receive 32 annual payments of $350,000, with the first payment being delivered today. The income will be taxed at a rate of 25 percent. Taxes will be withheld when the checks are issued.

b. You will receive $630,000 now, and you will not have to pay taxes on this amount. In addition, beginning one year from today, you will receive $300,000 each year for 31 years. The cash flows from this annuity will be taxed at 25 percent. Using a discount rate of 8 percent, what is the present value of your winnings? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Present value of

Option A $ Present value of

Option B $ 3183704.86